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London open: Stocks edge up as Shell, BP gush higher
London stocks edged higher in early trade on Monday, with heavyweights BP and Shell on the rise as oil prices jumped again, as investors continued to monitor the Russia-Ukraine conflict.
At 0840 GMT, the FTSE 100 was up 0.3% at 7,429.45, while oil prices surged following attacks on oil facilities in Saudi Arabia.
Victoria Scholar, head of investment at Interactive Investor, said: “After a mixed session in Asia with the Hang Seng in Hong Kong underperforming, European markets have opened the week mixed with the oil and gas sector outperforming. The FTSE 100 is hugging the flatline, trading just north of round number support at 7,400. US futures are pointing to a weaker start, after the major averages logged their best week since November 2020 thanks to a relief rally after the Fed finally began its rate hiking path.
“Oil prices have jumped more than 3% with WTI inching closer to resistance at $110 a barrel. This month has seen the sharpest oil market volatility since 2020 at the height of the pandemic, when the commodity became technically worthless.
“Monday’s sharp rally is being driven by ongoing constrained supply from OPEC+, a stalemate in peace talks between Russia and Ukraine, a potential Russian oil embargo from the European Union and a Houthi attack on a Saudi energy terminal, all exacerbating an existing imbalance between supply and demand in the market.”
On home shores, the latest data from property website Rightmove showed that asking prices for homes increased at their highest rate in almost two decades as demand vastly outstripped supply and despite soaring inflation.
Asking prices recorded between February 13 and March 12 were 10.4% higher year on year and 1.7% higher than the previous month’s reading – the biggest monthly jump since 2004.
They have now broken through the £350,000 barrier for the first time as the average price hit £354,564 in March.
Rightmove said the number of prospective buyers was double the number of homes for sale, a record for the time of year.
“We forecast a less frothy market in the second half of the year, as economic headwinds lead to a more evenly balanced market, though demand will still outstrip supply,” it said.
In equity markets, oil giants Shell and BP rallied as oil prices advanced.
Elsewhere, consumer products giant PZ Cussons ticked up after saying it had bought UK baby and child personal care company Childs Farm for £36.8m.
Copper miner Antofagasta was in the black after it agreed with Barrick Gold and the governments of Pakistan and Balochistan to exit the Reko Diq project.
Hargreaves Lansdown was the worst performer on the FTSE 100 after a downgrade to ‘underperform’ at Jefferies, while Balfour Beatty was knocked lower by a downgrade to ‘underweight’ at Morgan Stanley.
Outside the FTSE 350, Pendragon shares surged following a report the car dealership has rejected a secret £400m takeover approach from its largest shareholder, the Hedin Group.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | +3.41% | +55.50 | 1,682.50 |
| 2 |  |
Anglo American Plc | +2.74% | +101.00 | 3,785.50 |
| 3 |  |
Prudential Plc | +2.39% | +25.50 | 1,094.00 |
| 4 |  |
Bhp Group Limited | +2.38% | +61.50 | 2,646.50 |
| 5 |  |
Glencore Plc | +2.36% | +11.30 | 490.55 |
| 6 |  |
Shell Plc | +2.30% | +44.60 | 1,986.40 |
| 7 |  |
Bp Plc | +2.14% | +7.70 | 368.10 |
| 8 |  |
Burberry Group Plc | +2.00% | +34.00 | 1,735.00 |
| 9 |  |
Rio Tinto Plc | +1.67% | +94.00 | 5,715.00 |
| 10 |  |
Wpp Plc | +1.50% | +16.00 | 1,084.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -3.32% | -39.50 | 1,149.50 |
| 2 |  |
Hargreaves Lansdown Plc | -2.33% | -25.00 | 1,048.00 |
| 3 |  |
Pearson Plc | -2.20% | -17.80 | 790.20 |
| 4 |  |
Flutter Entertainment Plc | -2.09% | -200.00 | 9,392.00 |
| 5 |  |
Spirax-sarco Engineering Plc | -1.64% | -215.00 | 12,855.00 |
| 6 |  |
Halma Plc | -1.53% | -39.00 | 2,518.00 |
| 7 |  |
Easyjet Plc | -1.34% | -7.20 | 531.40 |
| 8 |  |
Segro Plc | -1.30% | -17.50 | 1,328.00 |
| 9 |  |
Sage Group Plc | -1.07% | -7.60 | 699.40 |
| 10 |  |
Smurfit Kappa Group Plc | -0.98% | -35.00 | 3,541.00 |
Europe open: Shares make subdued start as investors eye oil price
European shares made a subdued start to the week as investors continued to monitor the war in Ukraine with little corporate or economic news to dive sentiment.
The pan-European Stoxx 600 edged 0.17% higher in early deals after a largely weaker showing on Asian stockmarkets.
Oil process were firmer with Brent crude at $111 a barrel and West Texas Intermediate sitting at $108.
”Optimism is seeping away about progress in talks to achieve a ceasefire in Ukraine and that’s sent the price of oil on the march upwards again amid heightened worries about supply,” said Hargreaves Lansdown analyst Susannah Streeter.
“As Ukraine refuses to surrender to Russian forces in Mariupol despite the devastating siege of city, the chances of a breakthrough in negotiations are fading, with a gulf in position separating the two countries.”
“Investors are eyeing key NATO talks later this week, aimed at tightening the sanctions screw on Russia and the prospect of a European crude embargo is expected to be put on the table once more.”
In Germany, producer price inflation soared to a record 25.9% in February, up from 25.0% in January and 24.2% in December 2021, the Federal Statistics Office said. The jump in factory gate cost, a key indicator of consumer prices, was its largest since 1949.
In equity news, shares in Chile-based copper miner Antofagasta rose 3.3% as it announced an exit from its Pakistan copper and mining project.
US close: S&P 500 extends recent rally
Wall Street stocks closed higher on Friday as the S&P 500 extended its recent rally for a fourth consecutive day.
At the close, the Dow Jones Industrial Average was up 0.80% at 34,754.93, while the S&P 500 was 1.17% firmer at 4,463.12 and the Nasdaq Composite saw out the session 2.05% stronger at 13,893.84.
The Dow closed 274.17 points higher on Friday, extending gains recorded in the previous session as investors digested the Federal Reserve’s interest rate decision, jobless claims data, and news out of Russia and Ukraine.
The Russia-Ukraine conflict was again in focus on Friday after multiple missiles struck an aircraft repair centre on the edge Lviv in western Ukraine, while a Ukrainian official revealed that one person was killed in an airstrike that hit the nation’s capital of Kyiv.
President Joe Biden was also scheduled to speak with Chinese president Xi Jinping to discuss the ongoing conflict later in the day.
Rising Covid cases in Europe stemming from an emerging subvariant were also drawing an amount of investor attention as Covid cases increased sharply in the UK over recent weeks, while Germany continued to report record high daily infections, with more than 250,000 new cases a day. France, Switzerland, Italy, and the Netherlands have also seen Covid infections start to rise due to the relaxation of safety measures and BA.2 Omicron subvariant.
On the macro front, the Conference Board‘s leading index increased by 0.3% in February to 119.9, following a 0.5% drop in January and a 0.8% uptick in December.
Elsewhere, existing home sales sank 7% month-on-month to 6.02m in February, according to the National Association of Realtors, below market forecasts for a print of 6.1m for the lowest reading in six months.
No major corporate earnings were released on Friday.
Monday newspaper round-up: House prices, Saudi Aramco, property developers
The average price tag on a home in Great Britain has topped £350,000 for the first time, according to Rightmove. Typical asking prices hit £354,564 in March, up 1.7% or £5,760 compared with February, the property website said. It was the biggest monthly rise for this time of year in 18 years, and pushed the annual rate of growth in asking prices to 10.4%. – Guardian
Saudi Arabia’s state oil company said it would increase spending on oil production to meet rising global demand, as it reported a doubling of profits in 2021. Saudi Aramco – the world’s largest oil exporter and one of the world’s most profitable companies – said its net profit increased by 124% to $110bn (£83bn) in 2021, compared with $49bn a year earlier. – Guardian
Demand for iodine tablets has rocketed in the UK and EU as the Kremlin’s invasion of Ukraine stokes fears of nuclear war. UK manufacturer Oxford Health Company had a 15,000pc surge in page views for its tablets in March, compared to January, after a “considerable increase in demand for iodine” in the UK and Europe. – Telegraph
Michael Gove has opened up a new front in his war with Britain’s biggest housebuilders after describing them as a “cartel” in comments to Conservative activists. The Housing Secretary told the Conservative Environment Network last week that he had become unpopular with developers because of his stance on building safety. – Telegraph
The head of marine and aviation at the trade body which represents Lloyd’s of London insurers has urged the government to rethink the ethics and benefits of foreign ownership of national assets after what it called the pitiless treatment of P&O Ferries staff. Neil Roberts, of Lloyd’s Market Association, whose members write about £36 billion of premiums every year, said that “UK plc must look at safeguarding itself” after 800 staff were sacked last week without notice or consultation, to be replaced with cheaper agency workers believed to be from overseas. – The Times
Small brewers have expressed alarm at the government’s proposed reform of alcohol duty, and want to know why the mooted tax on cider will be only half the rate on beer. The government, which announced a review of alcohol duty in March 2020, launched a consultation in last year’s budget aimed at simplifying the “complex, burdensome and inconsistent” tax system. – The Times
