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Markets Thursday: FTSE bounces back, oil slips

Created:
16 July 2008
Updated:
17 July 2008
Written by:
Jonathan Eley

London equities rebounded on Thursday, in line with strong overnight gains in the US as embattled financial stocks found support. The FTSE 100 rose 0.9 per cent to 5,195.2, recovering 44 points after three sessions of steep selling. The upturn came after Wall Street indices mounted a convincing rally after strong earnings news restored faith in the battered banking sector.

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High street banks led the bounce. Royal Bank of Scotland, up 9.3 per cent at 180.4p was the biggest single riser on the FTSE 100 in opening trade. Barclays was 7.8 per cent higher at 287½p, and Lloyds TSB rose 8 per cent to 307p.

HBOS, the UK’s biggest mortgage lender, moved 4.9 per cent higher to 267p, but that is still below the 275p subscription price for the lender’s rights issue. Investors have until Friday morning to take up their rights.

Interdealer broker Icap rose 6.4 per cent to 483p and fund manager Schroders was 4.7 per cent higher at 912½p, while BlueBay Asset Management was 6 per cent stronger at 232p. The London Stock Exchange rose 4.5 per cent to 734½p.

Oil prices moved further below the $135 mark, helping heavy fuel users. British Airways was 4.7 higher at 235.8p and EasyJet rose 6.9 per cent to 307p.

DAILY TECHNICAL COMMENT

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MARKET DATA

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OVERSEAS MARKETS

Overnight in New York, the S&P 500 surged 2.5 per cent to 1,245.35, its biggest one-day gain since April. The Dow Jones Industrial Average gained 2.5 per cent to 11,239.28.

COMMODITIES

Oil prices fell sharply on Wednesday, extending their decline for a second session, after the latest US inventories data brought more evidence that demand was weakening in the world’s largest economy. Gold fell 1.2 per cent to $964.00 in late London trading, as oil's weakness prompted profit-taking.

Commodity Last Close
Gold London PM $939.50oz
August Brent crude $143.92/barrel
LME 3-mth Copper $8,270.50/tonne
Baltic dry index (freight) 9,181
December carbon €27.26/unit

FOREIGN EXCHANGE

The dollar clawed back some of its losses on Wednesday after the fifth-largest US bank posted better-than-expected results, oil prices slid back toward $130 a barrel and Ben Bernanke sent shivers through forex markets by mentioning the possibility of currency intervention. Sterling fell back through the $2 mark after data showed the number of unemployment benefit claimants in the UK jumped last month by its largest amount since 1992. Wage growth remained muted.

£1 EQUALS...
€1.253
$1.996
Sfr2.030
¥212.00

COMPANY NEWS ROUND UP

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