EconomyGlobal markets
FTSE 100 ends higher as airlines and housebuilders rally, BP slides 4% on oil rout
London's mid-caps jumped 1.4% as Brent sank to about $105 on hopes of a US-Iran deal, while oil producers took the hit and brickmaker Ibstock crashed on a profit warning.
Key points
- The FTSE 100 closed up 0.3% at 10,761.33 and the FTSE 250 rose 1.4%.
- BP fell 4.4% as Brent dropped to about $105, a day it completed the Castrol stake sale.
- Ibstock sank 10% on a profit warning after weak September and October trading.
London shares ended Monday higher, as a slump in oil on hopes of a deal to end the war with Iran lifted airlines and housebuilders and pulled down the big oil producers.
The FTSE 100 closed up 31.55 points, or 0.3%, at 10,761.33. The mid-cap FTSE 250 did much better, rising 1.4% to 24,795.85. In Paris the CAC 40 gained 1%, and Frankfurt’s DAX rose 0.6%.
Oil set the mood. Brent crude was trading at about $105.09 a barrel, down from $117.61 on Friday, after signals that Washington and Tehran could restart talks. Iran has said it could reopen the Strait of Hormuz within two days if the US agrees to end the war on all fronts.
That was bad news for the producers. BP dropped 4.4% to 600p, Shell lost 2.9% and Ithaca Energy fell 5.9%. BP also completed the $6 billion sale of a 65% stake in its Castrol lubricants business to Stonepeak Partners, keeping the other 35%. Castrol is a household brand in India, where its local arm is listed on the stock market.
Cheaper fuel sent the airlines the other way. British Airways owner IAG rose 3.8% and Wizz Air jumped 5.2%. Lower bond yields helped housebuilders, with Vistry up 8.9% and Barratt Redrow up 3.5%.
Brickmaker Ibstock was the day’s big loser, falling 10% after warning that its second half will be well below expectations. “Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October,” chief executive Joe Hudson said.
Gold was at $3,968.02 an ounce, up from $3,898.22 on Friday.
Attention now turns to Thursday, when the Bank of England is widely expected to raise rates by a quarter point to 4%. A survey on Monday showed UK factories growing at a five-month high in October. “UK manufacturing showed resilience in the lead-up to the autumn budget,” said Rob Dobson, a director at S&P Global Market Intelligence.
For Indian investors, the fall in crude is the main cue to watch when Dalal Street opens on Tuesday.