* FTSE up 1.3 pct, best day in a month
* Oil majors up as U.S. pulls out of Iran deal
* Belgian billionaire sells stake in Burberry, shares tumble
* Imperial Brands jumps after H1 results (Updates prices, adds details)
By Julien Ponthus and Helen Reid
LONDON/MILAN, May 9 (Reuters) - Oil stocks drove Britain’s leading stock index sharply higher on Wednesday after the U.S. decision to pull out of the Iran nuclear deal sent crude prices soaring.
The FTSE 100 index jumped 1.3 percent, easily beating other European bourses as commodities stocks surged and strong results sent tobacco firm Imperial Brands up. It was the index’s best day in a month
Oil majors Royal Dutch Shell and BP, up 3.1 percent and 3.3 percent respectively, delivered the biggest boost to the index as oil prices rose more than 2 percent. U.S. sanctions against Iran, an OPEC member, are expected to tighten global oil supply.
Leading the FTSE was heavyweight tobacco firm Imperial Brands, which jumped 6.2 percent after pledging to step up divestments and reporting first-half sales and profits slightly ahead of estimates.
Jefferies analysts found “a number of areas of encouragement for the market to hang its hat on” in Imperial’s results, including volumes, progress with its vapour business, and plans to sell off non-strategic assets for up to 2 billion pounds over the next 12 to 24 months.
Fashion house Burberry was the worst performer, down 6.1 percent after Belgian billionaire Albert Frere’s Groupe Bruxelles Lambert (GBL) sold its entire stake, amounting to 6.6 percent of Burberry’s shares.
“We do not believe (the disposal) should be seen as an indicator of any deterioration in Burberry’s fundamentals or a change in the equity story,” said Berenberg analysts, noting however that such an early disposal - after 1 1/2 years - is unusual in the context of GBL’s long-term investment strategy.
Compass Group shares also fell, down 4.7 percent after first-half results from the world’s biggest catering firm disappointed due to a steep decline in margins in Europe.
Bakery and food-to-go company Greggs sank 15 percent after it warned that profits for 2018 were likely to fall short of expectations and be at a similar level to 2017, blaming a dip in consumer demand.
“We have never been especially relaxed with the high teen multiple and the ‘safe haven’ status that this implied of Greggs,” wrote Peel Hunt analysts in a note.
“That halo has now slipped, and whilst turning negative after the shares have fallen 15 percent may appear to be ambulance-chasing, the shares still trade on nearly 17x price-to-earnings and that for us is too high,” they added, downgrading their recommendation on the stock from “hold” to “reduce”.
Still in the mid-cap segment of the market, shares in precision engineering group Renishaw soared 14.6 percent, on track for their best day in over two years after it raised its 2018 revenue guidance.
Sub-prime lender Provident Financial also jumped 6.6 percent as it said its recovery plans would deliver 2018 results in line with internal plans.
M&A was not a big stock mover. Vodafone inched up 0.5 percent after the world’s second-largest mobile operator announced a $21.8 billion deal to buy Liberty Global’s assets in Germany, the Czech Republic, Hungary and Romania. (Reporting by Julien Ponthus and Helen Reid Editing by Alison Williams)