EU stocks pause while Lon­don coasts high on ‘Santa Rally’

Kuwait Times - - BUSINESS -

Euro­pean stocks turned flat yes­ter­day but Lon­don coasted higher on the back of a Santa Rally in sub­dued trade af­ter a long Christ­mas hol­i­day. The Bri­tish cap­i­tal’s bench­mark FTSE 100 in­dex of top blue-chip firms won 0.4 per­cent from last Fri­day’s close, as traders re­turned from a four-day hol­i­day week­end.

Frank­furt and Paris, which had re­opened Tues­day, were both barely changed yes­ter­day. Thin trad­ing vol­umes are ex­pected to con­tinue dur­ing what is the last trad­ing week of 2016. “The FTSE 100 is higher ... as the so-called Santa Claus Rally ap­pears to have be­gun,” noted an­a­lyst David Cheetham at bro­ker­age XTB. “Ob­servers of the mar­kets have for many years no­ticed a strong propen­sity for stocks to rise in the pe­riod be­tween Christ­mas and the New Year and this phe­nom­e­non ap­pears to be play­ing out once more.”

Ac­cendo Mar­kets an­a­lyst Mike van Dulken noted that Lon­don was be­ing propped up by the com­modi­ties sec­tor on the back of ris­ing oil prices. The main cor­po­rate deal of the day was Bri­tish en­ergy gi­ant BP, which an­nounced it has bought a net­work of Aus­tralian petrol sta­tions from su­per­mar­ket chain Wool­worths for US$1.3 bil­lion (1.2 bil­lion eu­ros).

BP said in a state­ment that it will es­tab­lish a strate­gic part­ner­ship with Wool­worths in a deal for the pur­chase, re­brand­ing and op­er­a­tion of Wool­worths’ ex­ist­ing 527 fuel and con­ve­nience stores, plus 16 sites un­der con­struc­tion, for the equiv­a­lent of AUS$1.8 bil­lion. The com­pany’s share price bumped 0.7 per­cent higher to stand at 506.50 pence in Lon­don.

In Asia, Hong Kong stocks rose yes­ter­day to re­bound from re­cent lows. Tokyo shares ended flat de­spite Toshiba’s sec­ond straight dou­ble-digit plunge. Stock in the trou­bled Ja­panese con­glom­er­ate Toshiba plum­meted more than 20 per­cent as the com­pany said it may book a one-time loss of sev­eral bil­lion dol­lars over its US nu­clear busi­ness. Hong Kong fin­ished up 0.8 per­cent on the mar­ket’s first work­ing day since Christ­mas, while Shang­hai slid 0.4 per­cent by the close. Oil prices pushed higher ahead of US en­ergy in­ven­tory data due Thurs­day, but an­a­lysts said trad­ing vol­umes were around half typ­i­cal lev­els. “On such low vol­umes it’s dif­fi­cult to read much into the moves and fo­cus will turn to OPEC in the new year,” said CMC Mar­kets sales trader Alex Furber, re­fer­ring to planned out­put curbs by the oil car­tel to bol­ster prices.

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