LONDON (Alliance News) - A rebound in oil prices saw the FTSE 100 get off to the last week of November on the right foot, with Royal Dutch Shell and BP among the risers on Monday. "It looks like the general rally into year-end has begun, with US markets following the strong lead given by Europe and Asia and returning to work from their holidays with an apparent desire to buy up everything that isn't nailed down. November traditionally ends well for markets, and thus it appears to be at present, setting us up for further gains into December," said IG chief market analyst Chris Beauchamp.He continued: "Even crude has got in on the act, rallying 2% after its heavy drubbing last week, but we have seen this film before, and it hasn't ended well for the bulls lately. Eager buyers would do well to tread carefully, since it looks like the occupant of the White House is still very keen on talking down the oil price."The FTSE 100 index closed up 83.14 points, or 1.2%, at 7,036.00. The FTSE 250 ended up 186.11 points, or 1.0%, at 18,719.21, and the AIM All-Share closed up 7.61 points, or 0.8%, at 931.36.The Cboe UK 100 ended up 1.3% at 11,951.45, the Cboe UK 250 closed up 1.0% at 16,845.50, and the Cboe Small Companies ended flat at 11,389.40.In European equities on Monday, the CAC 40 in Paris ended up 1%, while the DAX 30 in Frankfurt gained 1.5%.The pound was quoted at USD1.2814 at the London equities close Monday, firm compared to USD1.2806 at the close on Friday.Theresa May on Monday told the House of Commons she has secured a Brexit deal which "delivers for the British people" and warned that rejecting it would put the UK on the path to division and uncertainty.However, the prime minister was loudly barracked by MPs as she insisted that no better deal was available to Britain than the Withdrawal Agreement and Political Declaration on future relations endorsed by EU leaders in Brussels on Sunday.European Commission President Jean-Claude Juncker has warned that there would be no more negotiation if MPs vote down the agreement, telling the BBC: "This is the best deal for Britain ... and this is the only deal possible, so if the House says no, we would have no deal."May's Commons address came after the National Institute of Economic and Social Research warned the mooted Brexit deal would shrink the value of the UK's economy by 3.9% a year by 2030.NIESR's analysis, commissioned by the People's Vote campaign, concluded the UK's gross domestic product per head would fall by 3% a year, amounting to an average cost per person a year of GBP1,090 at today's prices - the equivalent of losing the economic output of Wales or the City of London.The report said: "Our key finding is that if the government's proposed Brexit deal is implemented so that the UK leaves the EU Customs Union and Single Market in 2021, then by 2030 GDP will be around 4% lower than it would have been had the UK stayed in the EU."The euro stood at USD1.1340 at the European equities close Monday, largely unchanged from to USD1.1338 at the same time on Friday.Stocks in New York were higher at the London equities close, with the DJIA up 1.3%, the S&P 500 index up 1.3%, and the Nasdaq Composite up 1.7%. In London, oil majors such as Shell and BP were racking up gains amid a recovery in oil prices.Brent oil was quoted at USD60.75 a barrel at the London equities close Monday from USD58.78 late Friday. At the beginning of November, Brent traded in excess of USD70 a barrel. Shell 'A' shares tracked the price of the commodity higher to close up 2.7%, while 'B' shares ended up 2.9%. BP shares gained 2.4%.Oilfield services firms also climbed with John Wood Group rising 6.0% - also boosted as HSBC raised its rating on the stock to Buy from Hold - while Premier Oil gained 9.0%. In other commodities, gold was quoted at USD1,222.97 an ounce at the London equities close Monday, flat against USD1,222.80 at the close on Friday.At the bottom of the FTSE 100 was Melrose Industries, shedding 4.4%. Sky News reported the business turnaround firm is mulling its options after receiving some disappointing bids for recent acquisition GKN's Powder Metallurgy unit.Melrose, which took control of GKN in April after an acrimonious hostile takeover bid, has previously said it was exploring strategic options for the division. Sky said it has learnt that Melrose executives are deciding whether to go ahead with an immediate auction of GKN Powder Metallurgy following initial bids last week valuing the unit at around GBP1.6 billion. Sky said this figure was beneath analyst forecasts that the unit would command a price tag of GBP2 billion, and this has raised questions over whether Melrose could halt the sale process. Elsewhere on the London Stock Exchange, Flybe shares rose 34% - further to Friday's 71% gain - on a report that British Airways parent International Consolidated Airlines has entered the fray to buy the troubled airline. The Telegraph, citing "multiple industry sources", said that International Consolidated Airlines Group is in pole position to buy Flybe, with its regional network said to be a useful link to London's Heathrow airport, which is dominated by BA. This comes after Virgin Atlantic confirmed on Friday it is reviewing its options in respect of Flybe. These range from enhanced commercial arrangements to a possible takeover offer. Flybe and Virgin both noted that there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.Another stock gaining on takeover news was Faroe Petroleum, shares up 26% to 158.146 pence after a hostile takeover bid from its majority shareholder. DNO - which already has a 28% stake in Faroe - has made a 152p per share cash takeover offer, valuing Faroe at GBP607.9 million. The offer price represents at 45% premium to the 105p share price before its initial share purchase in April and 21% higher than Faroe's 125.8 pence share price at the close on Friday.Just after the market close, Faroe said it "strongly believes" the offer is "opportunistic" and "substantially undervalues" the company. The firm encouraged shareholders to take no action.Drugmaker Vectura sank 10% after the firm reported the failure of its VR475 phase three study.VR475 is a device consisting of budesonide delivered by Vectura's nebuliser inhalation system and is designed to treat patients with asthma.The results from the study indicated a trend in the reduction of the rate of clinically significant exacerbations among patients receiving either 1 milligram or 0.5 milligrams doses, taken twice daily during a 52-week period. However, the results did not reach statistical significance.VR475 will be fully impaired for 2018 resulting in a GBP40 million hit. In 2017, Vectura reported a pretax loss of GBP102.2 million. In Tuesday's economic calendar, Germany's import price index is at 0700 GMT with French consumer confidence at 0900 GMT and the CBI distributive trades survey at 1100 GMT. In the US, the S&P/Case-Shiller house price index is at 1400 GMT.In the UK corporate calendar, product testing and inspecting services firm Intertek releases a trading statement, while property investor Shaftesbury, water firm Pennon Group and retailer Pets at Home all publish interim results.
13 Oct 2015 07:45
