Recovery of ‘black stuff’ fuels FTSE

The London Stock Exchange relies heavily on its major oil players to help its leading index move – and yesterday was no different, as a rebound in oil prices helped boost the FTSE 100.

The index closed up 129.27 points, or 2.29 per cent, at 5,770.30. To show just how much the exchange benefited from BP, Shell and others, its European rivals could only manage modest growth.

Brent crude had spent much of Tuesday and yesterday sinking, hitting lows of less than $16 a barrel. But by the end of trading on the FTSE, oil had recovered by 6.9 per cent to $20.66 a barrel.

Connor Campbell, financial analyst at Spreadex, commented: “It would be nice for oil’s push higher to come from a less troublesome catalyst. Donald Trump’s order for the navy to ‘shoot and destroy’ Iranian gunboats that ‘harass’ American ships cause some investors to return to the black stuff.”

Oil prices have slumped in recent days, as the coronavirus pandemic led to a glut in supply, with demand tanking and storage facilities filling up.

David Madden, financial analyst at CMC Markets UK said: “The tumble in oil sparked fears that demand across the board would collapse, but now the outlook as isn’t as pessimistic.”

In company news, BP jumped 17.6p to 310.75p and Royal Dutch Shell’s “A” shares were up 75.2p at 1,385.2p thanks to the reverse in the oil price.

Shares in insurance giant Hiscox dropped 10p to 787.4p as bosses said they expect to pay up to $175 million (£142m) to settle claims due to coronavirus restrictions on travel, events and mass gatherings.

The fall was cushioned by the company revealing its “core small commercial package policies” do not provide cover for business interruption caused by the government’s coronavirus response.

Investors were cheering the good news from Fever-tree, as the mixer-maker said sales were robust as people were drinking at home. Shares closed up 177.5p, at 1,542p.

At online fashion retailer Boohoo, shares jumped 33.5p to 305p as bosses revealed a “marked” fall in sales last month due to the lockdown, followed by a swift rebound in April as the high street remains closed.