Oil and Wall St bounce send UK stocks sharply higher

People walk through the lobby of the London Stock Exchange in London January 2, 2016. ― Reuters pic
People walk through the lobby of the London Stock Exchange in London 2, 2016. ― Reuters pic

LONDON, Dec 28 — British shares jumped from multi-year lows today thanks to relief spilling over from the United States where stocks sprang back yesterday following steep losses as a turbulent 2018 neared its end.

The FTSE 100 rose 1.7 per cent and the FTSE 250 was 1.6 per cent higher, with just two more trading days left in the year. All sectors were firmly in positive territory by 1000 GMT and the FTSE was set for its best day since April.

Both indexes had sunk to their lowest in more than two years in the previous session with the mid-cap bourse closing just shy of confirming a bear market over concerns about the global economy.

Oil majors BP and Shell were the biggest boosts to the FTSE, up 2.6 per cent and 2.1 per cent respectively as oil prices rebounded.

Shares in exporter companies also climbed, led by British American Tobacco which rose 3.6 per cent.

Pharmaceutical giants GlaxoSmithKline and AstraZeneca added 1.7 per cent each while financial heavyweight Prudential rose 1.8 per cent.

Britain’s mid-cap index, which is more exposed to uncertainties at home, was aided by strength in industrials and bank shares.

In a surprising turn of events, sprang back to end in positive territory on Thursday after heavy losses for most of the day.

The United States and are locked in a trade war that has disrupted the flow of hundreds of billions of dollars of goods, but while trade relations between the US and were still fraught, some saw signs of progress in recent days.

“The have liberalised, they’ve set up for more discussions in January. It’s not going to be a straight road but I think there’s a little bit of cause for optimism there,” Chris Bailey, Raymond James analyst, said.

Persisting worries over a slowdown in the global economy compounded by the trade spat have put US bourses and their UK counterparts on course for their worst yearly losses since the 2008 financial crisis.

With a US government shutdown also ongoing and Brexit uncertainties remaining unresolved, the FTSE 100 was on track for its worst quarterly fall since 2011, when Europe was battling a sovereign debt crisis.

It was down 10.9 per cent this quarter.

Among a handful of stocks in the red, Xaar, which makes ink jets for printers, was the biggest loser on the small-cap index with a 12.3 per cent slide after cutting its revenue forecast for the year.

In more bad news for the retail sector’s already subdued festive spirit, entertainment retailer HMV Retail could enter administration, a report said. Data had separately showed sales on Boxing Day — a key day for the retail industry — dipped.

Sky News reported that HMV, Britain’s biggest high-street music retailer, could enter administration for the second time in six years and cut 2,200 jobs.

HMV would join the likes of Toys R Us, House of Fraser and Mothercare on the list of high-profile household names that have gone under this year amid Brexit jitters, lower consumer spending and rising labour costs. — Reuters

Source: The Malay Mail Online

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