FTSE 100 gets a leg-up from Shell and BP as oil price hits 11-month high



H

eavy lifting by oil giants BP and Royal Dutch Shell today continued to help paper over the cracks appearing in the London market’s fast start to the new year.

The FTSE 100 index surged more than 6% in the first week of 2021, but has been in retreat since as the slow roll-out of Covid-19 vaccines adds to worries about rising case numbers.

Oil prices have held firm, however, with Brent crude at an 11-month high of 56 US dollars a barrel amid hopes for a robust economic recovery in the second half of 2021.

That helped BP shares to add another 4.3p to 309.3p and Royal Dutch Shell to improve 13.4p to 1,446.8p as the heavyweight pair maintained their recovery from multi-year lows.

Their support also meant the FTSE 100 index improved 12.63 points to 6766.74, even though banks, miners and housebuilding stocks were all sharply lower.

Barclays put back 2p to 152.24p, having surged 2% yesterday on comments from the Bank of England governor Andrew Bailey that appeared to reduce the prospect of negative interest rates.

Rio TInto fell 76p to 6,052p after analysts at Deutsche Bank removed their “buy” recommendation and said some valuations in the commodities sector were starting to look full after a powerful recovery in the past few months.

One of the hottest stocks on the London market in recent weeks has been kitchen supplier Howden Joinery, which today delivered its second profits upgrade in as many months.

Amid the ongoing boost from home improvement trends, the trade business is now forecasting profits of £185 million in next month’s annual results. Investors are also optimistic for a return of dividend payments, helping shares add another 6.4p to 700.8p and taking Howden back to where it was prior to the pandemic market sell-off.

The FTSE 250 index was 38.60 points lower at 20677.48, despite an 8% surge for shares in  

Liontrust Asset Management after it recorded net inflows of £792 million in the final three months of the year. Shares were 95p higher at 1,345p.

The session also saw the AIM debut of Nightcap, which has been set up to acquire the ten-strong bars chain London Cocktail Club. The admission has raised £4 million at an issue price of 10p a share, giving the company run by entrepreneur Sarah Willingham a value of £13.5 million. Shares were later trading at 10.9p.

Related