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London open: Stocks gain as traders process major events
London stocks opened in positive territory on Monday as investors continued to process the previous week’s events including the US non-farm payrolls report and OPEC and European Central Bank decisions.
The US added more jobs than expected in November, according to the Labor Department’s non-farm payrolls report, which prompted some analysts to say it puts the Federal Reserve on the path to raising interest rates this month.
OPEC on Friday decided to keep production at current levels, as expected by the market. Oil stocks, including Royal Dutch Shell and BP, were in the red in morning trade.
“Any optimism over a possible production cut diminished rapidly when the group failed to agree on a production ceiling, leaving current production at 31.5M barrels per day,” said FXTM research analyst Lukman Otunuga.
“With concerns elevated around the aggressive oversupply in the markets, investor sentiment will remain haunted towards WTI Oil in the short-term and selling in the commodity will resume.”
The ECB last week decided to cut the deposit rate by 10 basis points and extend its quantitative easing programme until March 2017. However, the central bank decided against increasing monthly asset purchases of €60bn.
On Monday’s agenda there is little in the way of economic data, with traders turning their attention to company news.
RSA Insurance Group and Legal & General gained after they received UK regulatory approval to use their internal models to comply with the new European-wide Solvency II requirements to protect against financial shocks.
Serco slumped after the outsourcer said it expects revenue and trading profit to fall in 2016 partly due in part to the disposal of its offshore call centre, although underlying profit for 2015 is expected to be ahead of guidance.
Glencore advanced as it announced it will cut 180 jobs at its Collinsville mine in north Queensland, Australia, ABC News reported on Monday.
