AFP
London’s stock market rebounded yesterday as shares in heavyweight energy companies recovered thanks to steadier oil prices, traders said.
The insurance sector was in focus also after a tie-up was agreed between British companies Aviva and Friends Life, strongly lifting their share prices.
“Normal service has been resumed in oil today, after one of those rare days yesterday in which the price doesn’t go down,” said Chris Beauchamp of the IG consultancy.
“As the Opec-related excitement disappears, the fundamentals will take control yet again, which implies additional downside for crude into the year-end,” he added in a note.
London’s benchmark FTSE 100 index jumped 1.29% to close at 6,742.10 points.
Elsewhere, Frankfurt’s DAX 30 fell 0.30% to 9,934.08 points and the CAC 40 in Paris edged up 0.25% to 4,388.30 compared with Monday’s close.
Wall Street stocks gained in early trade yesterday, following upbeat data on “Cyber Monday,” seen by many as the yearly highpoint for online shopping.
About 35 minutes into trade, the Dow Jones Industrial Average stood at 17,823.42, up 46.62 points (0.26%).
The broad-based S&P 500 advanced 6.48 (0.32%) to 2,059.92, while the tech-rich Nasdaq Composite Index rose 15.68 (0.33%) to 4,743.03.
Crude prices dropped yesterday after spiking the day before. Prior to this, oil futures had fallen sharply after Opec’s decision last Thursday to hold output levels despite global oversupply.
In Tuesday trade, US benchmark West Texas Intermediate (WTI) for delivery in January shed 96 cents to $68.04 a barrel in late afternoon London trade.
Brent North Sea crude for January lost 99 cents to $71.55, compared with Monday’s close.
“The recent US dollar strength continues to weigh on market sentiment adding further pressure to most commodity prices,” said Myrto Sokou, an analyst at Sucden Research said.
“Crude oil prices reversed yesterday’s solid gains as the strong upside rally seemed to be short-lived.”
The Organization of the Petroleum Exporting Countries last week decided to maintain its output at 30mn barrels of oil daily amid a US energy boom that has transformed America’s energy picture and the global petroleum market as a whole.
A surge in US oil production has weighed heavily on prices, which have slumped by more than one third since June. Analysts say by keeping the market oversupplied and consequently keeping crude prices low, Opec is hoping to win back market share.
Shares in oil companies rose robustly yesterday as crude prices steadied, with Total winning 3.41% to 46.15 euros in Paris trading, Tullow Oil surging 5.77% to 423.6 pence and BP gaining 491% to 434.85 pence in London deals.
“The FTSE... continues to outperform this afternoon led by BP shares which have spiked on rumours of a potential offer from Royal Dutch Shell,” said Atif Latif, head of trading at Guardian Stockbrokers in London.
Away from the energy sector, shares in Friends Life jumped 2.43% to 375.1 pence and Aviva rallied 0.12% to 500 pence.
In foreign exchange yesterday, the euro fell to $1.2384 from $1.2469 late in New York on Monday.
The European single currency slipped to 79.19 British pence from 79.27 pence, while the British pound dipped to $1.5638 from $1.5729.
Russia’s rouble bounced back after its biggest one-day fall in 16 years.
