London blue-chip shares pared some of their losses on Thursday as oil prices staged a mini-comeback.
The FTSE 100 Index, which dropped as low as 5829 earlier in the session, recovered to stand 89.32 points off at 5871 by lunchtime.
Brent prices hit their lowest levels since April 2004 on Wednesday amid concerns about rising crude stocks, before bouncing back into the close.
A barrel of Brent crude rose 1.5% to US$30.76 and the price of a barrel of US light crude lifted 1% to US$30.8.
Jasper Lawler at CMC Markets said: "Brent crude oil dipped below US$30 p/b for the first time since 2004 after poorly-received US inventories data added to jitters, following reports that suggested a quicker-than-expected lifting of Iranian sanctions."
The Bank of England left UK interest rates on hold again on Thursday, with only one member of the central bank's nine-strong monetary policy committee voting for a hike.
ING economist James Knightley said low oil prices, weaker wage growth, disappointing GDP figures and the UK's EU referendum, tipped to take place this summer, would likely affect the timing of any rate rise.
He said: "The uncertainty that the EU vote will generate is likely to see a loss of momentum in the UK economy. If the vote is held in June and the UK votes to remain in the EU, we look for a November move. If the UK leaves, it is likely to be substantially later."
Back in equities, Tesco (LON:TSCO) surprised with news of higher festive sales, sending its shares 6p, or 3.8%, higher to 164.35p. The supermarket chain said group like-for-like sales in the six weeks to January 9 gained 2.1%.
Discounter B&M European (LON:BME) was also a big riser, gaining 5.6% to 271p after reporting a 23.5% increase in sales revenue between September 27 and December 26.
JD Sports Fashion (LON:JD.) raced ahead 44p, or 4.16%, to 1102p as it upped its profits forecast for the current year by 10% after double digit sales growth over Christmas.
But investors got a sour taste in their mouths from an update by Frankie & Benny's owner Restaurant Group (LON:RTN), which said like-for-like sales growth would be lower as the firm feared tough trading would not ease in 2016. Shares slumped 108.5p, or 17%, to 529.5p.
Elsewhere, fund manager Miton Group (LON:MGR) advanced 7.5% to 28.5p on news of significant momentum with £463mln of net inflows.
Keras Resources (LON:KRS) ticked up 0.02p to 0.48p as the miner formerly known as Ferrex said it was on track to start production from its new gold venture in Australia in the second quarter.
LONDON OPEN
The London market plunged on Thursday as falling oil prices hit markets in the US and Japan overnight.
The FTSE 100 Index dropped 106.7 points to 5854 after Wall Street closed with heavy losses last night and the Japanese Nikkei reversed 475 points.
Rising crude stocks fuelled further falls in oil prices, with a barrel of Brent crude shedding 0.4% to US$30.17, although West Texas Intermediate climbed 0.5% to US$30.64.
Brent prices hit their lowest levels since April 2004 on Wednesday, before bobbing back above into the close.
Chief market analyst at CMC Markets UK, Michael Hewson, said: "The main question remains as to how much further crude oil prices can fall with the prospect of a move towards the 2004 lows at US$28 the potential next target."
With the Bank of England's monetary policy committee set to announce another UK interest rate hold on Thursday, it fell to retailers to provide the market interest in London.
Tesco (LON:TSCO) surprised with news of higher festive sales, sending its shares 6.7p, or 4.2%, higher to 165p. The supermarket chain said group like-for-like sales in the six weeks to January 9 gained 2.1%.
Discounter B&M European (LON:BME) was also a big riser, gaining 6.27% to 272.8p after reporting a 23.5% increase in sales revenue between September 27 and December 26.
JD Sports Fashion (LON:JD.) raced ahead 47p, or 4.4%, to 1105p as it upped its profits forecast for the current year by 10% after double digit sales growth over Christmas.
But investors got a sour taste in their mouths from an update by Frankie & Benny's owner Restaurant Group (LON:RTN), which said like-for-like sales growth would be lower as the firm feared tough trading would not ease in 2016. Shares slumped 81p, or 12.7%, to 557p.
Elsewhere, fund manager Miton Group (LON:MGR) advanced 8.5% to 28.75p on news of significant momentum with £463mln of net inflows.
MARKET PREVIEW
London’s FTSE 100 is set to give up about 1% as the market opens on Thursday, following US benchmarks lower after the price of crude plunged again.
Wall Street closed with heavy losses last night. The Dow Jones ended down 365 points, 2.2%, at 16,151 while the S&P 500 and Nasdaq Composite lost 2.5% and 3.45 respectively.
Technicians pointed out that at current levels the major US indices are now approaching territory that would be considered a ‘correction’ - i.e. 10% off the highs.
It came as Brent crude set yet another 12-year low, dipping below US$30 briefly. Currently, the Brent contract is down just over 2% at US$30.22 while West Texas Intermediate has edged slightly higher to trade at US$30.80.
In Asia, China’s Shanghai Composite was rebounding with a near 2% gain. The other markets, however, saw red.
Japan’s Nikkei fell around 2.7% to 17,240. Hong Kong’s Hang Seng dipped 0.4% to 19,860. And, Australia’s ASX 200 was about 1.5% lower at 4,909.
London’s FTSE 100 is being called some 58 points lower by spread-betting and CFD firm IG Markets, which quotes the blue-chip benchmark at 5,889 to 5,895.