LONDON MARKET CLOSE: FTSE 100 keeps head above water on oil strength

(Alliance News) - The FTSE 100 was able to outperform European peers on Wednesday - a reversal from Tuesday - as the commodity-heavy index was getting a lift from oil companies and miners.

"The prospect of heavy pressure on European consumers from higher energy prices is driving down the Dax and others, although the FTSE 100 has escaped the worst of it for now," Chris Beauchamp, chief market analyst at IG, said.

The FTSE 100 index closed up 41.50 points at 7,578.75 on Wednesday. The mid-cap FTSE 250 index dropped 219.50 points, or 1.0%, to 21,272.47. The AIM All-Share index ended up just 0.29 of a point at 1,046.68.

The Cboe UK 100 index closed up 0.4% at 752.36. The Cboe 250 ended down 1.5% at 18,716.89, and the Cboe Small Companies was up 0.1% at 15,365.15.

Beauchamp continued: "Once again rising commodity prices have been the sticking plaster for the FTSE 100, masking losses across most of the rest of the index. All this is a far cry from 2020, when the FTSE 100's lack of tech names saw it fall far behind its peers.

"Now it is commodities that are providing the steady hand, although even the big miners and oil stocks in the index will only be able to limit the damage if the broader outlook turns more cautious."

Brent oil was quoted at USD113.56 a barrel Wednesday evening in London, up from USD109.35 at the European equities close on Tuesday. Gold stood at USD1,934.80 an ounce, up from USD1,910.78 late Tuesday.

Thanks to the rising commodities, Shell and BP closed up 4.4% and 3.1%, respectively. Diversified miners Anglo American, Rio Tinto and Glencore advanced 4.6%, 4.0% and 4.2%. Also, gold miners Fresnillo and Endeavour Mining gained 4.1% and 2.7%.

The downbeat mood in Europe stemmed from the Kremlin on Wednesday playing down hopes of a breakthrough following peace talks between Russian and Ukrainian delegates in Istanbul a day earlier.

"We cannot state that there was anything too promising or any breakthroughs," Kremlin spokesman Dmitry Peskov told reporters. "There is a lot of work to be done," Peskov said.

He added that Moscow considered it "positive" that Kyiv had started outlining its demands in writing.

Moscow's lead negotiator, Vladimir Medinsky, described talks in Istanbul on Monday as "meaningful".

The DAX 40 in Frankfurt fell 1.4%, while in Paris, the CAC 40 index was down 0.9%

German inflation is set to surge past an annual rate of 7% in March as the conflict in Ukraine drives up energy prices, statistics office Destatis said on Wednesday.

The consumer price index is set to jump 7.3% in March on a year before, over two percentage points higher than February's increase of 5.1%. Consensus, according to FXStreet, had pencilled in just a 6.3% rise.

This is largely due to energy prices, which are on track to shoot up 40% in March after an already hefty 23% increase in February.

Back in London, Pearson was anchored to the bottom of the FTSE 100, losing 5.9%, as the education publisher said a third takeover proposal made by Apollo Global Management "significantly" undervalued the company and its future prospects.

Pearson therefore rejected the offer by the New York-based private equity and investment management firm, it said. Apollo previously confirmed that it now doesn't intend to make a formal offer for Pearson.

John Menzies, however, added 4.0%, as it accepted a final offer from GIL International, a subsidiary of Kuwait's Agility Public Warehousing Co KSCP.

The deal ends a long-running saga. Back in early-February, Menzies said it rejected a 510p bid from its Kuwaiti suitor. It followed a previous unsolicited cash offer of 460p a share, the company explained.

The agreed deal, at 608 pence per share, values the Edinburgh-based aviation services and cargo handling firm at GBP571 million on a fully diluted basis and offers an enterprise value of GBP763 million.

The price tag is 81% higher than the company's share price of 335p on February 8, the day before the approach by Agility was first announced. It is 6.7% higher than its 570p closing price on Tuesday. John Menzies shares closed at 592.00p on Wednesday.

John Menzies has a market capitalisation of GBP544.2 million.

In London's junior market, Empire Metals jumped 36% after it completed reverse circulation drilling at its Gindalbie Gold project in Western Australia. The four holes drilled at the Homeward Bound target returned three "very high-grade" intercepts.

Intercepts at the target include: 5 metres at 8.99 grammes per tonne of gold from 31 metres downhole, 3 metres at 8.96 grammes per tonne of gold from 98 metres downhole and 3 metres at 9.88 grammes per tonne of gold from 46 metres downhole.

Belluscura added 19% on AIM after it signed a manufacturing master supply agreement with InnoMax Medical Technology Ltd, a joint venture between MexNerva Technology Services Ltd and China's National Centre for Advanced Medical Devices.

The agreement is for the manufacture of the X-PLO2R portable oxygen concentrator in China.

Belluscura said the agreement will more than double its manufacturing capacity next year.

Stocks in New York were lower at the London equities close. The DJIA was down 0.2%, the S&P 500 index down 0.5% and the Nasdaq Composite down 0.8%.

The pound was quoted at USD1.3163 Wednesday evening in London, up from USD1.3135 late Tuesday. The euro stood at USD1.1163, up from USD1.1113. Against the yen, the dollar was trading at JPY121.94, down from JPY122.57.

In the international economics calendar on Thursday, there is a manufacturing PMI from China overnight, followed by UK GDP and Nationwide housing prices and German retail sales and unemployment in the morning. At 1000 BST, there is eurozone unemployment, then US initial jobless claims at 1330 BST.

In a busy local corporate calendar, there are full-year results from currency manager Record PLC and social housing provider Mears Group, among many others.

By Paul McGowan; paulmcgowan@alliancenews.com

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