Commodities lead FTSE 100 higher
THE FTSE 100 was carried higher by a global stock surge as investors cheered the “blue ripple” in the US midterms and speculation swirled that the oil cartel Opec could turn off the production taps again.
Investors piled back into equities on hopes that a split Congress will constrain the US president while keeping in place the market-friendly policies that have underpinned the latest leg of the ageing bull run. Global stocks leapt higher after the uncertainty hanging over markets lifted and the dollar’s retreat boosted metals priced in the currency.
The dollar slid on the fading prospect of Donald Trump pushing through more stimulus and forcing the Federal Reserve to push up interest rates in the US further.
Fresnillo and Anglo American led the buoyant mining sector higher as metal prices pushed ahead on the weaker dollar. The FTSE 100 miners climbed 31p to 902p and 32.6p to £17.33 respectively, while heavyweight peer Rio Tinto rallied 62p to £39.31.
Oil prices fluctuated ahead of Opec’s meeting over the weekend after reports speculated that the oil cartel and Russia are mulling a 2019 cut to output following the recent slide in prices. Rising US shale production and waivers being granted for sanctions impacting Iranian crude exports have revived oversupply fears.
Brent crude rallied off a 12-week low before its 2pc gain was wiped out late in trading by data indicating a jump in oil stockpiles. Despite the late dip in prices, oil giants BP and Royal Dutch
Shell ‘B’ climbed 4.7p to 544.3p and 18p to £24.74 respectively. The jump in commodities underpinned the FTSE 100’s 76.60-point climb to 7,117.28, while US shares hit their highest level since the “Red October” sell-off.
Elsewhere, Royal Mail slid back towards a record low after ousting UK post and parcels boss Sue Whalley after 12 years in the wake of its recent profit warning. Royal Mail closed 5p lower at 348p, leaving its shares just 10p away from an all-time low.
BT shares briefly suffered a 3.2pc dip after investors were spooked by fears that a Supreme Court decision would create a precedent for corporate pension schemes. It ruled that charity Barnardo’s could not switch to a lower measure of inflation to reduce its pension liabilities. BT, which also has a large pension deficit, eventually finished 1.8p lower at 249.3p.
Associated British Foods enjoyed its strongest share price surge in 2018 as City scribblers gushed over its Primark division following Tuesday’s update, gaining 105p to £25.65.
Hammerson clawed back from its early slide to inch down just 1.1p to 441.9p as Barclays warned in a downgrade to “underweight” that the Birmingham Bull Ring owner may be one of the hardest hit in the sector.
Pub operator Greene King followed sinking rival JD Wetherspoon to drop 11.3p to 489.3p after Citigroup told clients that its peers could also be hit by rising staff cost pressures. Finally, video game maker Codemasters surged 16.5p to 170p after Jefferies initiated coverage with a “buy” rating.