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Britain's FTSE steadies near 1-month high, supported by oil
December 12, 2016 / 9:58 AM / a year ago

Britain's FTSE steadies near 1-month high, supported by oil

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

* FTSE 100 flat

* Shell, BP among the top risers

* Polymetal leads precious metals miners lower

* Sky pulls back after Friday’s Fox bid surge

By Alistair Smout

LONDON, Dec 12 (Reuters) - Britain’s top share index held near a one-month high on Monday, supported by a surge in the oil sector after OPEC and non-OPEC producers agreed to curtail oil production in their first joint action since 2001.

The FTSE 100 touched a fresh one-month high in early deals of 6,976.78, before pulling back slightly. The index was last down 2.21 points, flat in percentage terms, at 6,952.00.

Energy stocks contributed around 30 points to the index, with Royal Dutch Shell up 3.3 percent, the top FTSE 100 gainer, and BP up 2.4 percent.

Oil prices soared around 5 percent on the deal, which was seen strengthening last month’s OPEC deal to reduce the supply of oil on the market.

“The OPEC deal made two weeks ago hinged on the non-OPEC members also agreeing to cut production - many members of OPEC had stated that they would only agree to cut production on the basis the non-members also agreed,” said James Hughes, chief market analyst at GKFX.

“The agreement puts the issue of a global oil glut to rest, but only for now,” he said.

Among fallers, Polymetal dropped 4.5 percent after RBC cut the stock to “sector perform” from “outperform”.

“Polymetal remains an industry-leading precious metals company ... However, with increasing gold price volatility, high levels of 2017 capex and a higher (free-cash flow) breakeven price than peers we downgrade to Sector Perform,” analysts at RBC said in a note.

Other precious metals miners Randgold and Fresnillo fell 2.8 percent and 2.5 percent respectively as gold fell to a 10-month low.

Shares in Sky edged down after seeing a record gain of nearly 27 percent on Friday after a $14 billion takeover bid from Twenty-First Century Fox.

The stock pulled back 0.6 percent on Monday, as shareholders and analysts said the offer represented a “low-ball” bid, with one major shareholder set to reject the offer.

Fellow broadcaster ITC dropped 2.8 percent.

Retailer Marks and Spencer rose 1.6 percent, benfitting from an upgrade to “buy” from Bank of America-Merrill Lynch, who cite confidence in the company’s turnaround story and improving cash generation. (Reporting by Alistair Smout; Editing by Andrew Heavens)

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