FTSE gains in early trade on commodities, asian stocks

FTSE gains in early trade on commodities, asian stocks
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First Published: Thu, Aug 20 2009. 01 11 PM IST
Updated: Thu, Aug 20 2009. 01 11 PM IST
London: Britain’s top share index rose 1.0% in early trade on Thursday, driven by gains in heavyweight energy stocks as crude prices firmed on lower US stockpiles, and tracking gains in the US and Asian markets.
By 0733 GMT, the FTSE 100 was up 47.74 points at 4,737.41, after reversing earlier losses to close slightly higher on Wednesday.
Heavyweight oil producers added the most points to the index, as crude prices climbed above $72 a barrel, buoyed by industry data showing a steep drop in crude imports and stockpiles in top consumer the United States.
BP, Royal Dutch Shell, BG Group, Tullow Oil and Cairn Energy put on 1-1.9%.
Also in the resources sector, BHP Billiton, Anglo American, Xstrata, Vedanta Resources, Lonmin and Kazakhmys were up 1.5-3.1%, helped by firmer metal prices.
Rio Tinto, the world’s second-largest miner, added 1.7% after posting a record drop in first-half profit, in line with market forecasts, and saying it was confident about the future after a tough 18 months.
“The tone today is very much set by the Asian rebound overnight,” said Tim Hughes, head of sales trading at IG Index.
“The whole market is being really driven from a global context and continuing positive sentiment among traders. In spite of the equity market performance over the last few months, no one seems willing to give up the ghost on this rally.”
The UK benchmark has gained 37% since hitting a floor in early March, and is up 6.8% so far this year. However, volumes on the index have been low on average in August, the height of the northern hemisphere’s summer.
Hughes said the low summer volumes raised the question of how much one can read into the daily market movement as a longer-term trend.
Chinese stocks surged 4.5% and Japan’s Nikkei average gained 1.8%.
US stocks rose on Wednesday, shaking off a slide in China’s equity market, as investors responded favourably to a surprising drop in crude oil stockpiles that might suggest an improving demand outlook.
Banks were other standout gainers on the FTSE 100, with HSBC , Royal Bank of Scotland, Barclays, Standard Chartered and Lloyds Banking Group up 0.9-3.7%.
UK retail sales, due at 0830 GMT, will provide a gauge of the state of the British economy. Investors will shift their focus to US weekly jobless claims later in the day.
Among individual movers, Diageo slipped 1% after ING downgraded the drinks group to “hold” from “buy”.
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First Published: Thu, Aug 20 2009. 01 11 PM IST
More Topics: Markets | UK | Asian markets | FTSE | Crude oil |