Last Update 22:46
Thursday, 24 October 2019

Oil majors curb FTSE losses as crude surges after Saudi attacks

Reuters , Monday 16 Sep 2019
Views: 863
Views: 863

Surges for oil majors BP and Shell shielded London's FTSE 100 index on Monday from concerns over the economic impact of higher crude prices following attacks on Saudi Arabian production facilities.

The FTSE 100 fell 0.2% by 0817 GMT, outperforming half percentage falls for Europe's main indexes. The FTSE 250 was also down just 0.3%.

BP jumped 3.8% and Shell 2.8% as the attacks on Saturday shut about 5% of global supply, triggering the biggest intra-day percentage gain in Brent crude since the Gulf War in 1991.

Both stocks were headed for their biggest one-day rise in more than seven months.

However, higher oil prices knocked airline and cruise operator stocks on fears of increased costs. Carnival and British Airways owner IAG fell 3% and 2%, respectively.

"The last thing the beleaguered travel sector needs is sustained higher oil prices so it's no surprise that airline stocks have come under pressure in early trade," CMC Markets analyst Michael Hewson said.

Asia-facing financial shares and miners also weighed on the index, after data showed that China's slowdown deepened in August with growth in industrial production at its weakest 17-1/2 years.

The FTSE banking index lost 1.1% and the mining index slid 0.7%.

In news-related moves, wealth manager St. James's Place fell 3.4% to the bottom of the main index, with traders citing a report that said the company would likely axe bonus scheme of its partners.

Petra Diamonds slumped 8% to a record low after the company posted annual core profit that missed analysts' expectations amid a tough diamond market.

Centrica added 1.6% after a report that a consortium of infrastructure funds is in advanced talks to buy a stake in Britain's nuclear power stations from EDF Energy and Centrica for about 1.2 billion pounds.

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