LONDON MARKET CLOSE: FTSE 100 continues outperforming on oil strength

Wed, 24th Nov 2021 16:58

(Alliance News) -Â London's blue-chip stock index on Wednesday managed to outpace mainland Europe once again on strong oil prices, which lifted the likes of Royal Dutch Shell and BP.

The FTSE 100 index closed up 19.63 points, or 0.3%, at 7,286.32. The FTSE 250 ended down 54.55 points, or 0.2%, at 23,167.06, and the AIM All-Share closed down 5.64 points, or 0.5%, at 1,201.17.

The Cboe UK 100 ended up 0.2% at 722.68, the Cboe UK 250 closed down 0.4% at 20,655.01, and the Cboe Small Companies ended down 0.3% at 15,242.36.

In European equities on Wednesday, the CAC 40 in Paris ended flat and the DAX 40 in Frankfurt ended down 0.4%. Both indices finished off session lows, with the DAX recovering some poise after a centre-left-led alliance of parties announced a deal to form Germany's new government with the SPD's Olaf Scholz to be the next chancellor.

Still, the European bourses lagged London's FTSE 100 for another session.

"The FTSE 100 is outperforming again, helped in part by the oil price hitting its highest levels in over a week, which in turn is underpinning BP and Shell," said Michael Hewson, chief market analyst at CMC Markets.

Brent oil was quoted at USD82.73 a barrel at the London equities close Wednesday, up from USD81.49 late Tuesday.

Oil prices continued to climb higher despite US President Joe Biden on Tuesday announcing the US would release crude from its national stockpile along with China, India, Japan, Korea and Britain in a bid to drive global prices lower.

Royal Dutch Shell 'A' and 'B' shares closed up 1.2% and 1.3% respectively in London on Wednesday, while BP rallied 1.5%.

CMC's Hewson added that the FTSE 100 was also helped as travel stocks reversed morning losses to end higher, despite lockdown worries continuing to rock Europe.

The EU health agency on Wednesday appealed to member states to "urgently" introduce measures to counter surging Covid-19 cases, a day after the WHO Europe warned that 700,000 more may die on the continent this winter.

The euro stood at USD1.1195 at the European equities close Wednesday, down from USD1.1262 at the same time on Tuesday.

Europe's return to the pandemic's epicentre has been blamed on sluggish vaccine uptake in some nations, the highly contagious Delta variant, colder weather moving people indoors again and the easing of restrictions.

Austria at the start of the week went back into lockdown, prompting fears that the rest of Europe could follow suit.

Nonetheless, shares in British Airways parent International Consolidated Airlines closed up 0.9%, mid-cap easyJet rose 0.3% and Ryanair advanced 0.9%.

Ending at the top of the FTSE 100 was Intertek, up 6.0% after the quality assurance service provider said it as made "strong progress" so far in the second half of 2021.

Revenue rose by 6.7% in the four months from July to October, the firm said, with the growth pace picking up to 8.5% in September and October from 4.8% in July and August. Intertek is on track for "robust like-for-like revenue growth" and "margin progression" in 2021.

Entain fell 3.2% after a group of UK MPs wrote to the Telegraph newspaper to demand the government takes "bold" action to reform the gambling sector. Specifically, the group of MPs are keen to see measures put in place measures to curb the scale of betting.

Johnson Matthey slipped 2.2% as it posted a pretax loss of GBP9 million in the six months to September 30, compared to a profit of GBP26 million a year earlier. Johnson booked GBP314 million in major impairment and restructuring charges in the period.

Genus was the worst performer in the FTSE 250, slumping 10% on challenges in the Chinese pig market. The FTSE 250 company, which sells products made using biotechnology to cattle and pig farmers, said the volumes from its pigs business in China were lower in the four months to October 31 compared to the year before, due to a downturn in the market in China and significant volatility.

Genus said full-year pretax profit for financial 2022 will be "moderately lower" than its previous expectation.

Brewin Dolphin fell 5.7% despite ending September 30 with GBP56.9 billion in total funds under management, up 20% from the same point a year before at GBP47.6 billion. Net inflows in the year totalled GBP2.1 billion.

However, it did warn that operating costs in financial 2022 will rise by a mid- to high-single-digit percentage, due to wage increases and the one-time cost of running systems in parallel.

On AIM, IQE shares slumped 24% on a profit warning. Adjusted earnings before interest, tax, depreciation, and amortization is now seen at about GBP18 million, which is about GBP25 million at constant currency, down from GBP30.1 million in 2020.

Interim Chief Executive Phil Smith said: "Whilst it is disappointing that 5G infrastructure deployments have remained weak all year, we still expect this macro trend to provide a multi-year growth cycle for IQE."

Stocks in New York were mixed on Wednesday as the Thanksgiving break loomed, with the Dow Jones down 0.1% but the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.2%.

While stocks diverged, the dollar charged ahead, spurred on by some strong prints as part of a pre-Thanksgiving data deluge.

For the week to November 20, initial jobless claims totalled 199,000, down 71,000 from the previous week's revised figure. The Department of Labor said this marked a new low since the middle of November in 1969, when claims hit 197,000.

Additionally, the US Bureau of Economic Analysis's second reading of the country's gross domestic in the third quarter saw an annual rise of 2.1%, which was revised up from the initial reading of a 2.0% increase.

And finally, personal consumption expenditures grew 5.0% year-on-year for October, accelerating from September's 4.4% rise. Stripping out energy and food, the core index - the Fed's preferred inflation gauge - increased 4.1% annually, in line with expectations and ticking up from 3.7% in September.

The pound was quoted at USD1.3328 at the London equities close Wednesday, down compared to USD1.3363 at the close on Tuesday. Against the yen, the dollar rose to JPY115.38 from JPY114.96 late Tuesday.

Gold was quoted at USD1,790.62 an ounce at the London equities close Wednesday, recovering somewhat from USD1,784.01 at the close on Tuesday.

The economic calendar on Thursday has German GDP at 0700 GMT and minutes from the last European Central Bank meeting at 1230 GMT.

Markets in the US are shut on Thursday for Thanksgiving and will reopen for a half-day on Friday.

Thursday's UK corporate calendar has a trading statement from insurer Aviva and full-year results from pub operator Mitchells & Butlers.

By Lucy Heming;Â lucyheming@alliancenews.com