London open: FTSE recovers after heavy falls as miners, energy shares gain
London stocks rose in early trade on Tuesday after suffering their worst session since the 2008 financial crisis a day earlier amid collapsing oil prices, as investors pinned their hopes on central bank stimulus.
At 0840 GMT, the FTSE 100 was up 1.7% at 6,064.67, recovering after a collapse in oil prices and worries about the coronavirus sent the index into bear territory on Monday.
Oil prices were stabilising, with Brent crude up 5.7% at $36.44 a barrel and West Texas Intermediate up 6.9% at $33.42. For context, Brent was trading at $70 a barrel at the start of the month.
Spreadex analyst Connor Campbell said: "A measured, lightweight rebound felt like it was on shaky ground after the bell rang this Tuesday, with there already being signs that investors are going to need to hold their nerve if the gains are to last until the end of the session.
"There were a couple of things behind Europe’s green start. Firstly, a fall as great as that seen on Monday is always going to attract a few vultures, swooping in to pick at the market’s bloody carcass - remember, the global indices are now heavily discounted from the all-time highs struck just a month ago.
"Then there was Donald Trump, attempting to gee-up investors by suggesting he was preparing a ‘major’ economic relief package in the US, one that would potentially include a payroll tax cut and provisions to protect hourly workers. This likely gave further justification at those looking to enter the market at a potential bargain price."
He also pointed to the fact that Italy is now in complete lockdown, with internal travel restrictions stretching far beyond the initially quarantined northern part of the country. "A serious reaction to a serious situation, which is good. But boy will it be costly," said Campbell.
In equity markets, miners and oil stocks were among the top performers following heavy losses on Monday, with BHP, Rio Tinto, Anglo American, Shell and BP all higher.
Informa advanced as the global exhibitions group said it had cancelled or delayed 128 events with an estimated revenue of £425m due to the coronavirus outbreak but reported a 13% rise in full-year pre-tax profit.
Budget airline easyJet flew higher after an upgrade to ‘outperform’ at Bernstein and Ultra Electronics rallied after reporting a rise in full-year profit and revenue as it secured a number of new contract wins.
Specialist media company Future was also trading up as it said it was postponing two UK events due to the coronavirus but that it did not expect any impact on profits for the fiscal year from the epidemic.
Asset manager Standard Life Aberdeen was in the green even as it reported a fall in adjusted full-year profits as revenues declined due to lower fee income.
On the downside, M&G - which demerged from Prudential in October - was weaker as it posted a decline in full-year pre-tax profit but growth in assets under management, and announced the launch of a voluntary redundancy scheme.
Meggitt was knocked lower by a downgrade to ‘hold’ at Berenberg.
Market Movers
FTSE 100 (UKX) 6,064.67 1.66%
FTSE 250 (MCX) 17,749.18 1.15%
techMARK (TASX) 3,575.06 1.14%
FTSE 100 - Risers
BHP Group (BHP) 1,174.40p 5.67%
Rio Tinto (RIO) 3,431.00p 5.60%
Royal Dutch Shell 'B' (RDSB) 1,359.00p 4.15%
easyJet (EZJ) 1,018.00p 4.11%
Royal Dutch Shell 'A' (RDSA) 1,371.20p 4.05%
Aveva Group (AVV) 3,666.00p 3.79%
Informa (INF) 584.80p 3.69%
Anglo American (AAL) 1,557.40p 3.67%
Tesco (TSCO) 248.40p 3.28%
BP (BP.) 328.65p 3.28%
FTSE 100 - Fallers
M&G (MNG) 169.60p -1.62%
Phoenix Group Holdings (PHNX) 655.80p -0.74%
National Grid (NG.) 973.20p -0.42%
Meggitt (MGGT) 482.60p -0.25%
Imperial Brands (IMB) 1,553.20p -0.21%
Smith & Nephew (SN.) 1,581.00p -0.16%
Coca-Cola HBC AG (CDI) (CCH) 2,224.00p -0.13%
United Utilities Group (UU.) 918.20p -0.11%
Carnival (CCL) 1,677.00p 0.21%
Reckitt Benckiser Group (RB.) 5,748.00p 0.21%
FTSE 250 - Risers
Pershing Square Holdings Ltd NPV (PSH) 1,424.00p 16.91%
Premier Oil (PMO) 30.60p 16.75%
Ultra Electronics Holdings (ULE) 2,100.00p 10.18%
Tullow Oil (TLW) 17.29p 8.09%
Aston Martin Lagonda Global Holdings (AML) 225.50p 7.84%
Domino's Pizza Group (DOM) 301.10p 5.76%
Henderson Smaller Companies Inv Trust (HSL) 887.00p 5.22%
Virgin Money UK (VMUK) 116.00p 4.46%
PureTech Health (PRTC) 265.00p 3.92%
Finablr (FIN) 41.84p 3.46%
FTSE 250 - Fallers
Cairn Energy (CNE) 81.60p -4.39%
Airtel Africa (AAF) 53.80p -2.18%
Centamin (DI) (CEY) 129.70p -2.11%
Watches of Switzerland Group (WOSG) 323.00p -1.88%
Ascential (ASCL) 270.00p -1.82%
Hyve Group (HYVE) 46.15p -1.81%
Energean Oil & Gas (ENOG) 433.00p -1.70%
Capita (CPI) 54.88p -1.47%
Stagecoach Group (SGC) 105.00p -1.22%
Capital & Counties Properties (CAPC) 186.85p -1.19%