London close: Shares ride oil price gains higher
London stocks snapped back on Wednesday, taking their cue from a slight rebound in European markets - Italy in particular - helped by gains in shares of the largest oil explorers.
The FTSE 100 gained 0.75% to 7,689.57, while the pound was up 0.29% against the dollar at 1.32862 and down 0.7% versus the euro to 1.1399.
Helping to steady investor sentiment were local media reports out of Italy suggesting that talks were ongoing among a wide range of political parties to craft a coalition government that could provide the country with a modicum of economic and political stability.
Although some analysts were being quite cautious, others such as those at Nomura, were guardedly optimistic, pointing to the sound macroeconomic situation in most euro area countries and the solid outlook for demand in the US.
"There are several features of the backdrop at present that suggest to us that the regional and broader global risks from Italy's instability ought to be quite modest," they said.
Helping to lift shares of BP, Shell and Tullow, citing sources familiar with Saudi thinking, Reuters reported that the Kingdom, other OPEC members and its allies from outside the cartel would stick to their agreed oil output curbs which were due to last until the end of 2018.
Meanwhile, traders appeared to be taking US President Trump's renewed threat to impose $50bn of tariffs on Chinese imports in their stride.
Likewise, in a research report sent to clients analysts at Oxford Economics said the impact of the proposed levies on the US economy would be "minimal".
However, the consultancy did add that: "looking ahead, we assume some tariff imposition between the US and China, and simmering tensions surrounding industrial policy and technology transfer. With both economies viewing the other as not playing “fair”, the risk of tension escalation is real."
In UK corporate news, following reports a day earlier that the government is planning to sell part of its stake in the bank this week, RBS was in the red as it announced that its chief financial officer and executive director Ewen Stevenson has resigned to take up an opportunity elsewhere.
LondonMetric nudged up after it said full-year EPRA earnings rose 15.9% to £59.1m and net rental income was up 10.8% and TP ICAP slipped after announcing that chairman Rupert Robson plans to retire at the end of December.
On the upside, AstraZeneca was a touch higher despite saying that the Terranova phase 3 trial of its first respiratory biologic treatment, Fasenra, did not meet its primary endpoint of reducing exacerbations in patients who have chronic obstructive pulmonary disease.
FTSE 250 heat treatment provider Bodycote surged as it posted a jump in revenue for the first four months of the year and said it now expects full-year revenue to be higher than previously anticipated, with headline operating profit also seen slightly ahead of current consensus forecast.
Phoenix Group gained as it launched a £950m capital raising to help fund its acquisition of Standard Life Aberdeen's insurance arm, while Essentra rose as it appointed Lily Liu as its new chief financial officer.
In broker note action, Dunelm was cut to ‘neutral’ JPMorgan, while Go-Ahead was downgraded to ‘hold’ at Liberum.
Centamin was upgraded to ‘buy’ at Panmure Gordon and Capital & Counties was lifted to ‘neutral’ Kempen & Co..
Market Movers
FTSE 100 (UKX) 7,689.57 0.75%
FTSE 250 (MCX) 20,822.67 0.37%
techMARK (TASX) 3,536.98 0.40%
FTSE 100 - Risers
Royal Dutch Shell 'A' (RDSA) 2,619.50p 2.64%
BP (BP.) 573.50p 2.56%
Royal Dutch Shell 'B' (RDSB) 2,687.00p 2.28%
BHP Billiton (BLT) 1,708.80p 1.98%
GlaxoSmithKline (GSK) 1,525.20p 1.84%
Burberry Group (BRBY) 2,029.00p 1.73%
Mediclinic International (MDC) 627.80p 1.68%
Micro Focus International (MCRO) 1,344.00p 1.63%
Anglo American (AAL) 1,780.00p 1.61%
Halma (HLMA) 1,365.00p 1.34%
FTSE 100 - Fallers
G4S (GFS) 271.10p -1.85%
Royal Bank of Scotland Group (RBS) 276.10p -1.39%
Melrose Industries (MRO) 233.00p -1.06%
International Consolidated Airlines Group SA (CDI) (IAG) 684.80p -0.98%
Reckitt Benckiser Group (RB.) 5,916.00p -0.82%
London Stock Exchange Group (LSE) 4,448.00p -0.71%
BT Group (BT.A) 204.18p -0.68%
Smurfit Kappa Group (SKG) 3,106.00p -0.64%
Rolls-Royce Holdings (RR.) 822.00p -0.60%
easyJet (EZJ) 1,710.00p -0.58%
FTSE 250 - Risers
Bodycote (BOY) 989.50p 6.97%
Tullow Oil (TLW) 248.85p 4.79%
Centamin (DI) (CEY) 126.75p 4.71%
Cairn Energy (CNE) 236.00p 4.70%
B&M European Value Retail S.A. (DI) (BME) 389.90p 4.53%
RPC Group (RPC) 786.60p 3.50%
RDI Reit (RDI) 38.00p 3.40%
Wood Group (John) (WG.) 670.40p 3.11%
Convatec Group (CTEC) 227.80p 3.03%
Pets at Home Group (PETS) 126.70p 2.84%
FTSE 250 - Fallers
Go-Ahead Group (GOG) 1,741.00p -5.33%
Stobart Group Ltd. (STOB) 225.50p -5.25%
Auto Trader Group (AUTO) 351.20p -3.62%
TalkTalk Telecom Group (TALK) 112.70p -3.18%
FirstGroup (FGP) 110.80p -2.89%
Provident Financial (PFG) 636.40p -2.84%
Ferrexpo (FXPO) 214.00p -2.73%
IP Group (IPO) 134.60p -2.46%
Serco Group (SRP) 94.45p -2.33%
Wizz Air Holdings (WIZZ) 3,325.00p -2.26%