FTSE grows 2.5%

Sharply lower oil prices helped the London market break a three-day losing streak today as the blue chip share index rallied 2.5%.

Sharply lower oil prices helped the London market break a three-day losing streak today as the blue chip share index rallied 2.5%.

Investors piled out of oil and mining stocks and into financials and travel firms as the cost of crude plunged to below US$119 a barrel.

The FTSE 100 Index closed up 134.3 points at 5454.5, helped also by a strong start on Wall Street ahead of an expected no change vote on US interest rates.

Robust figures from Asian-facing bank Standard Chartered added to the positive sentiment, while slightly better than expected UK service sector data also gave reason for investor cheer.

Companies in the travel sector made strong gains, with Thomas Cook up 12%, or 24p, to 224p and Thomson owner TUI Travel soaring 10% with a 20.1p rise to 215.5p. Meanwhile British Airways added 12.75p to 267.75p.

Stronger than forecast results from Standard Chartered saw it add 119p to 1542p in a good session for financials. HBOS rose 36.5p to 336.25p and Barclays was 30p higher at 369.25p, ahead of results later this week.

Results from life and pensions giant Legal & General, which were seen as reassuring after a 6% rise in half-year operating profits, helped its shares forward 12% or 11.7p to 108.3p.

The leading Footsie riser was heating and plumbing giant Wolseley, which was up 15% or 52.25p to 405.5p on talk of a major disposal. The share price was further boosted by speculation that French building products firm Saint-Gobain could be looking to bolster its distribution operation.

The same factors meant Wickes owner Travis Perkins gained 93.5p to 700p in the FTSE 250 Index.

Recruitment firm Michael Page International was among the biggest second-tier risers after shares jumped 33% following its confirmation of a takeover approach from European rival Adecco. Shares were 986.75p higher at 352p, valuing the firm at £1.1bn (€1.4bn), while fellow headhunter Hays added 8.75p to 90p.

Sentiment in the FTSE 250 improved across a range of sectors, with JD Wetherspoon and Sports Direct International among a number of stocks ahead by 10% or more. They improved 36.75p to 270p and 11.25p to 77.75p respectively.

Battered housebuilders also showed some signs of life, with Charles Church owner Persimmon ahead 54.5p at 366p and Bovis Homes up 60.25p at 418p.

One of the worst performers in the FTSE 100 was prospector Tullow Oil, hit by the oil price as it slipped 32.5p to 735p. Eurasian Natural Resources was also suffering, down nearly 5% or 48p to 950p – although the mining sector picked up slightly from its poor start to the session.

Oil major Royal Dutch Shell fell 14p to 1722p and BP slipped 6p to 512p.

The biggest Footsie risers were Wolseley up 52.25p at 405.5p, HBOS up 36.5p at 336.25p, Legal & General ahead 11.7p at 108.3p and Thomas Cook up 24p at 224p.

The biggest Footsie fallers were Man Group down 48.5p at 565p, John Wood Group down 21p at 391.25p, Eurasian Natural Resources off 48p at 950p and Ferrexpo down 11.5p at 257p.

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