Oil stocks boost FTSE 100 as China data signals recovery


Oil Stocks FTSE China signals recovery
10 Aug, 2020 10:45 am

(Reuters) – London-listed shares rose on Monday as a slowdown in China’s factory deflation in July brewed optimism around a post-pandemic economic rebound, while energy stocks tracked a jump in oil prices.

The commodity-heavy FTSE 100 was up 0.8%, with BP Plc and Royal Dutch Shell Plc the biggest boosts as oil prices rose 1% on Saudi Aramco’s upbeat view on Asian demand and an Iraqi pledge to deepen supply cuts. [O/R]

The mid-cap FTSE 250 gained 0.7% to a seven-week high, led by industrial, consumer discretionary and financial stocks.

World stocks were also slightly higher as investors awaited more U.S. government stimulus after President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments.

“The building blocks of a longer-term appreciation in asset markets remain firmly in place (with) the tidal wave of free central bank money and fiscal stimulus sloshing around in the world’s financial system looking for a home,” said Jeffrey Halley, market analyst at OANDA.

The FTSE 100 has rallied about 24% since its March low but has unperformed both European and U.S. benchmarks as a persistent rise in COVID-19 cases threatens a nascent business recovery. The country on Sunday reported its highest daily rise in new infections since late June.

All eyes this week will be on a clutch of data, including the unemployment rate and June gross domestic product figures.

Traders are also hopeful of a Brexit trade deal after Britain’s top minister overseeing negotiations said on Friday he was confident of an agreement with the European Union.

Fashion retailer Superdry jumped 15% to a one-month high after agreeing a new 70 million pound ($91.5 million) lending facility to get it through the coronavirus crisis.

Outsourcing group Capita Plc rose 3.7% as it said it had received a five-year extension to its contract with Transport for London for 355 million pounds ($464 million).


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