LONDON, Dec 8 — Britain’s top stock index rose yesterday after a tumultuous week, supported by a rally in oil stocks after Opec and Russia agreed to cut output, but investors also fretted about next Tuesday’s key parliamentary vote on Brexit.
The FTSE 100 rebounded from Thursday’s plunge to gain 1.1 per cent, but put in its worst weekly performance in two months as jitters over Britain’s divorce from the European Union, the US-China trade war and worries about global growth sapped confidence in the UK market.
The British parliament is due to vote next Tuesday on Prime Minister Theresa May’s Brexit deal amid expectations that it will be rejected, prolonging the uncertainty over Britain’s future relations with its biggest trading partner.
Financials, consumer stocks and oil majors boosted the index.
Oil stocks rallied after Opec and its Russia-led allies agreed to slash output by more than the market had expected even as Washington ramps up pressure to reduce the price of crude.
BP rose 2.3 per cent, Shell was up 3 per cent for its best day since June, while mid-caps Premier Oil had its biggest daily gain since July 2017 and Tullow Oil jumped 7.4 per cent.
Still, many investors and analysts remained unconvinced that the gains represented a change in sentiment.
“Are people going to put new cash to work convincingly now, thinking this is the low? I can’t see there’s any urgency to do that now really,” said Ian Williams, analyst at Peel Hunt.
“It does look like a bounce from an extreme technical oversold level, but I don’t think it means we’re out of the woods yet by any means,” he said.
Shares in Associated British Foods fell 4.6 per cent after the Primark owner said trading at its budget fashion chain was challenging in November.
“The next three weeks will be critical, and there may be a chance to reverse the trend if the weather normalises,” Credit Suisse analysts said.
Marks & Spencer shares also eased 0.3 per cent, as traders said Primark’s weaker performance reflected broader challenges for retail.
Shire fell 1.6 per cent, among the worst-performing FTSE 100 stocks. Japan’s Takeda Pharmaceutical, the company acquiring Shire, suffered a 5 per cent slide in its shares overnight.
Mid-caps saw some big moves.
Intellectual-property investment firm IP Group’s shares fell 5.4 per cent after Jefferies cut its rating on the stock to “underperform” from “hold”.
“Against our earlier hopes for second-tier portfolio companies to step up to diversify dependence on Oxford Nanopore, hopefuls have largely failed to deliver, the listed portfolio drags and the market remains largely uninterested — ominously with the next significant funding beginning to loom,” Jefferies analysts said.
Real estate company Daejan Holdings sank 5.6 per cent after its first-half results.
Shares in tour operator Thomas Cook fell a further 5.4 per cent, having suffered sharp falls this week.
Genus fell 5.9 per cent after the company announced a placing of three million new shares.
On their first day of trading, shares in retail investment platform AJ Bell surged 37.5 per cent. The firm’s IPO valued it at £651 million (RM3.45 billion). — Reuters
