London shares ended soft on Monday with a setback in efforts to curb the oil glut and listless trading on account of a market holiday in the United States.
The US market was closed for Labor Day and that impacted on volumes in London.
In spite of failures at Russia-Saudi Arabia oil talks - the world’s top two crude-oil producers pledged to cooperate to stabilise global markets, but did not announce any specific measures - the price of Brent crude repaired itself and was up 1.4% at $47.50.
The blue-chip FTSE 100 index closed down 0.2% at 6,879, and led south by Royal Bank of Scotland (LON:RBS) down 3.5% to 197.10p and Provident Financial (LON:PFG) down 2.3% to 3,028p.
The FTSE 250 of mid-cap stocks closed up 0.05% at 18,025.97. Last week, the ticker scaled 18,000 after inching its way back and beyond pre-Brexit levels.
Property search company Zoopla (LON:ZPLA) was the top riser among mid-caps, of 7.8% to 330p. Zoopla got a boost on Monday as Barclays upgraded the stock to 'overweight' from 'equalweight' and lifted the price target to 335p from 250p ahead of the investor day on September 15. Near term, the bank said current trading for uSwitch was likely strong, leading to potential consensus upgrades.
The FTSE AIM 100 Index ended down 0.05% at 3,770 while the FTSE AIM All-Share Index edged 0.06% higher to 795.
London’s gainers and unchanged were matched at 36% on Monday while losers were the remaining 28%.
London’s biggest riser was Anglo African Agriculture (LON:AAAP) up 285% to 2.5p. The London Main board-listed food manufacturing company announced it is no longer in an offer period as defined by the City Code on Takeovers and Mergers following the conclusion of its strategic review, and has completed a placing of 70,895,521 new ordinary shares at a placing price of 0.67 pence per share to raise gross proceeds of £475,000. The proceeds of the Placing will be utilised to satisfy the Company’s creditors and provide the necessary working capital to grow its fully owned food manufacturing and marketing business, Dynamic Intertrade (Pty) Limited
In other news, Prime Minister Theresa May is to launch a consultation in on corporate governance in the autumn, with the prime minister telling a press conference at the G20 summit in China she will “crack down on excessive corporate pay” and give employees and customers representation on company boards.
Speaking at her first G20 summit, May said there needed to be “bold action at home and collective action abroad”. She said world leaders had “decided to do more to stop aggressive tax avoidance and fight corruption”.
Mid-session report
Hopes of limiting the oil supply glut subsided on Monday as Russia-Saudi Arabia talks turned into a damp squib.
Crude prices pared gains of up to 5% as the two nations agreed merely to hold extra talks and coordinate policy more while monitoring prices.
It was not what investors wanted to hear ahead of a meeting later this month in Algeria, which has sparked hopes of a freeze or reduction in the oil supply.
Prices reacted accordingly, with a barrel of Brent crude standing 1.3% up at US$47.44. US light crude rose 1.4% to just over US$45.
Miners took heart that the oil price fall was not more severe, leaving the top-flight index 9.9 points adrift at around 6885.
Randgold Resources Ltd (LON:RRS) was the top blue-chip riser as the price of gold lifted slightly to US$1,330 an ounce on the back of a weakening dollar.
Small-cap indices were mixed and the UK-focused FTSE 250 was modestly in the black.
The pound rallied as markets took heart from G20 pressure on the UK to water down a potential EU exit.
British service sector purchasing managers' index data returned to positive territory, but business confidence stayed well below its long-run trend.
Among small-cap stocks, shares in AEC Education Plc (LON:AEC) more than doubled to 2.6p after it appointed Dr Sam Malafeh to deputy chief executive and issued him with new shares.
Frontera Resources Corporation (LON:FRR) ticked up 10.5% to 0.1p after the oil & gas explorer and producer upgraded the gas potential and reported progress at its operations in Georgia.
Plutus PowerGen PLC (LON:PPG) sparked 4.3% to 1.2p as the stand-by electricity generation developer reported lower annual losses and higher revenues.
But shares in Pantheon Resources Plc (LON:PANR) fell 40% to 90p after the US oil explorer temporarily stopped drilling work on a well in Texas.
News of problems with an investment agreement hit Central Asia and Caspian-focused oil group Tethys Petroleum Ltd (LON:TPL) by 40% to 1.12p.
88 Energy Ltd (LON:88E) dropped 14.4% to 2.82p as it changed its plans for the proposed Icewine 2 well in Alaska, where it now intends to drill a vertical well rather than a more complex and more expensive lateral well.
Back in the top flight, banks and financial stocks were feeling the pinch with Royal Bank of Scotland Group PLC (LON:RBS) and Lloyds Banking Group PLC (LON:LLOY) and unconventional lender Provident Financial PLC (LON:PFG) all off more than 2%.
Morning market report
Hopes of a deal to freeze or reduce oil output helped to stem losses on the FTSE 100 Index on Monday.
A buoyant performance by miners and oil majors propped up the top-flight index, which was four points adrift at just over 6890.
Small-cap indices were also in the red, but the UK-focused FTSE 250 picked up 28 points to 18044.
The pound rallied modestly as markets took heart from G20 pressure on the UK to water down a potential EU exit.
The price per barrel of Brent crude and US light crude rose more than 2% amid optimism about the outcome of an unofficial OPEC meeting later this month.
Mike van Dulken at Accendo Markets said: "it looks to be an oil price spike that is really helping sector sentiment and of course the FTSE heavyweight oiI majors.
"The driver remains unclear, but optimism of proper cooperation between Russia and Saudi Arabia may be gaining traction to offset global glut fears ahead of this month’s much hyped unofficial OPEC-led production freeze meeting in Algeria. We’ve been here before though."
British service sector purchasing managers' index data returned to positive territory, but business confidence stayed well below its long-run trend.
Among small-cap stocks, Frontera Resources Corporation (LON:FRR) ticked up 21% to 0.11p after the oil & gas explorer and producer upgraded the gas potential and reported progress at its operations in Georgia.
Plutus PowerGen PLC (LON:PPG) sparked 10.6% to 1.3p as the stand-by electricity generation developer reported lower annual losses and higher revenues.
But shares in Pantheon Resources Plc (LON:PANR) fell by a third to 100p after the US oil explorer said it was temporarily stopping drilling work on a well in Texas.
Central Asia and Caspian-focused oil group Tethys Petroleum Ltd (LON:TPL) was also down a third at 1.25p on news of problems with an investment agreement.
Oil and gold on the rise – 9:45
Crude oil prices were in plus territory in what will likely be a quieter day, given the Labor Day public holiday in the United States.
In London trading Brent jumped about 5% to trade at around US$48.90 while West Texas Intermediary futures were 3.8% higher at US$46.24 per barrel.
Elsewhere, a weak US dollar provided a boost for the price of gold, with the December futures contract up US$3.30, or 0.25%, at US$1,329.90 an ounce in electronic trading.
The greenback retreated as Friday’s US jobs report suggested the Fed would be in no hurry to raise interest rates.
Opening snapshot at 8.15am
The FTSE 100 opened up seven points to 6,901 this morning.
The top winner was Mondi (LON:MNDI), up 1.5% to 1,578p.
Royal Bank of Scotland Group (LON:RBS) was the biggest loser at 201p, down 1.5%.
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Preview at 6.56am
FTSE 100 is called to open a shade lower as what looks like a fairly busy trading week begins and after the key US jobs report on Friday failed to meet expectations.
The employment report for August showed that 151,000 jobs were created last month (August), which was fewer than the around 175,000 many had expected.
It has meant traders are lowering expectations for a Fed interest rate rise on September 21 given the weaker number and general economic malaise across the globe, and therefore are less worried over a tightening of monetary policy stateside.
The blue-chip FTSE 100 index however soared on Friday and ended up 148 points, or 2.2%, at 6,894 – standing nearly 600 points higher of its levels on June 23, the eve of the Brexit poll result.
Today, financial spreadbetters at IG Index are calling it to open 2.5 points lower.
In Asia overnight, the US jobs number and the possible implications have given shares a boost. The Nikkei 225 in Japan is up 1.73% to 23,671 and the Shanghai Composite Index is 0.22% higher at 3,074.
On Wall Street on Friday, the Dow Jones added 0.39% to close at 18, 491, while the S&P500 gained 0.42% to stand at 2,179. The tech heavy Nasdaq added 0.43% to close at 5,249. New York is closed today for Labor Day.
On the corporate front today, we have Dechra Pharmaceuticals PLC (LON:DPH) and Hunting Plc (LON:HTG), while on Tuesday, the UK housing market is thrown centre stage with a trading statement from Berkeley Group Holdings PLC (LON:BKG) and results from Redrow plc (LON:RDW).
City headlines
'Britain can leave EU and still thrive, says Stiglitz'
'Hinkley Point deal out of date and too expensive, says energy chief' - Daily Telegraph
'Brexit: Japan warns firms may move European HQ out of Britain' - BBC
'Formula One supremo Bernie Ecclestone insists he will remain top dog even if the sport gets new owners' - Daily Mail
'May rejects shake-up of EU migrant rules' - Financial Times