Oil stocks gain like on Wall St
Brexit minister offers sterling gains
Pound closes $1.2586
FTSE 100 shares closed lower on Thursday, as oil sector gains failed to catch on.
The benchmark FTSE 100 share index shed 30.86 points, or 0.45%, to 6,752, led by Coca-Cola HBC (LON:CCH) down 3.9% to 1633p.
Initially, the value of the pound jumped 1.1% after Brexit Secretary David Davis said the UK would consider making payments to the EU to get access to the single market. But none of this made any difference to the blue-chip ticker which spent the entire session under water.
It many ways it was a repeat of what had been happening on Wall Street the past two sessions – oil stocks gaining on the OPEC deal while the overall markets enjoys none of the spoils.
Shares in oil companies were higher, as they continued to benefit from OPEC's decision on Wednesday to cut output by 1.2 mln barrels a day.
BP (LON:BP.) shares rose 2.3% to 470.05p while Royal Dutch Shell (LON:RDSB) was up by 2.8% to 2178p.
After jumping about 10% on Wednesday in the wake of OPEC's decision, oil prices continued to rise, with Brent crude up 4.3% at $54.05 a barrel.
But oil stocks were not the top risers. That title was owned by Dixons Carphone (LON:DC.) up 3.8% to 344.4p as broker Credit Suisse initiated coverage of the stock at 'outperform' with a 12-month 420p price target, implying a one-year total shareholder return of 30%.
CS argued that Dixons Carphone was a rare example of a successful retail merger, pointing out that since the combination just over two years ago, it has gained significant market share in its core markets and demonstrated robust operating and best-in-class profitability metrics in what is widely considered to be one of the toughest sub-sectors in retail - consumer electricals retailing.
Elsewhere on the stock market, shares in Daily Mail and General Trust (LON:DMGT) rose 4.9% to 800.47p after it reported a 14% increase in full-year profits to £247mln, with revenues up 4% to £1.9bn.
Meanwhile in allied media, Euromoney Institutional Investors plc (LON:ERM) was the top gainer on the FTSE 250 mid-cap index, rising by 10.5% to 1191p. The FTSE 250 closed down 0.3% at 17,497.
The FTSE AIM 100 Index closed down a sharp 1.1% at 3890 and the FTSE AIM All-Share Index down 0.7% to 813.
Across the London bourse only 24% of stocks gained while losers totalled 38% of the market.
12:15 - FTSE 100 down 1%; consumer goods stocks hit
FTSE 100 off 1%
Consumer goods stocks hit
Pound over US$1.26
The consumer goods stocks were hardest hit as the FTSE 100 traded 1% lower in early afternoon trade.
Unilever and Coca-Cola HBC were hit after the official data pointed to an upturn in manufacturing costs.
BP and Shell topped the leader board after OPEC pledged to cut output for the first time in eight years.
At 12.15pm the index of blue-chip shares was trading 75 points lower at 6,709.08.
Among the smaller companies Games Workshop shone after and upbeat trading statement.
The pound, meanwhile, was trading above US$1.26.
FTSE 100 little changed
Big oilers higher
Footsie reshuffle sees Travis Perkins out
9am
FTSE 100 opened little changed, with big oil firms as expected making gains on the back of OPEC's decision to cut crude output.
The blue chip index is down 0.06% or around four at 6,779 at the time of writing, with BP (LON:BP.) top dog, up 3.47% to around 475p, with Royal Dutch Shell plc picking up second prize on the podium - up 2.67% to 2,175p.
Brent crude at the time of writing is up 3/5% to US$50 a barrel.
The production cut was the first since 2008.
Yesterday’s market close saw the final reshuffle of the premier index for 2016, and demoted was building group Travis Perkins (LON:TPK), which has seen shares plunge 30% since the June exit vote and issued a profit warning last month.
Precious metals mining group Polymetal International (LON:POLY) is also out after a poor performance in the gold price.
Coming into the index for the first time is paper and packaging group Smurfit Kappa (LON:SKG) and wound firm Convatec (LON:CTEC)
Meanwhile, Countrywide PLC (LON:CWD) and DFS Furniture Plc (LON:DFS) will be replaced in the mid-tier FTSE 250 index by new additions Nostrum Oil & Gas (LON:NOG) and Ferrexpo (LON:FXPO).
FTSE 100 set for tepid start despite crude boost from OPEC
London’s FTSE 100 is set for a tepid start to Thursday even though oil markets have been boosted by news of an OPEC production cut.
How much scrutiny does the OPEC deal stand up to?
Perhaps not much, but significantly there was an agreement where there may not have been.
Brent crude gained 8% moving back just above US$50 per barrel, while West Texas Intermediary crude gained almost 10% to also change hands above the psychologically important US$50 level.
“After months of prevarication yesterday’s OPEC deal did manage to generate a fairly decent rebound in oil prices, as they announced their first production cut since 2008," said CMC Markets analyst Michael Hewson.
“It must be noted though that the deal agreed will only return output back to levels last seen in the first half of this year at 32.5m barrels a day, a cut of 1.2m barrels, effective from 1st January 2017, for six months.
The analyst added: “Even accounting for the cuts announced yesterday these new levels will still be at the high end for daily output for OPEC production over the last ten year period, at a time when Russia is still pumping at record levels of 11m barrels a day and US shale producers are waiting on the sidelines to further increase their own output.
“Even though yesterday’s OPEC deal was good news for the energy sector the response of equity markets was slightly more nuanced, with US markets closing lower on the day, albeit having posted their best monthly performance since July, while European markets only managed to post modest daily gains, while closing lower on the month, as the divergence between Europe and US markets continued.”
New York’s Dow Jones closed Wednesday just a sliver higher at 19,123 while the S&P 500 dipped 0.27% to 2,198 and the Nasdaq fell 1% to 5,323.
In Asia, meanwhile, Japan’s Nikkei was up 1.12% trading at 18,513. The Shanghai Composite was up 0.47% at 3,264 and Hong Hong’s Hang Seng climbed 0.4% to 22,883.
Australia’s ASX 200 was up 1.1% at 5,500.
In London, IG Markets sees the FTSE 100 a few points lower. The CFD and spreadbetting group is calling the index at 6,769 to 6,773 about an hour before Thursday’s open.