London close: Equities finish higher as oil prices rise

The FTSE 100 closed higher on Tuesday as oil prices recovered and investors weighed mixed US data ahead of the Federal Reserve’s interest rate announcement.

Oil prices moved back above $30 per barrel after falling below that level earlier in the session. Brent crude rose 2.9% to $31.43 per barrel and West Texas Intermediate increased 2.6% to $31.15 per barrel at 1622 GMT.

“Oil traders have taken Monday’s drop as an opportunity to cover shorts and buy into a possible interim bottom following the massive two-day surge last week,” said Jasper Lawler, market analyst at CMC Markets.

Meanwhile, OPEC and Russian oil industrial officials on Monday signalled the possibility of joint action to tackle the supply cut.

“Any joint action seems unlikely since US shale producers would just use the resulting higher prices as an opportunity to ramp up their own again,” Lawler said.

In economic data, the Conference Board revealed that US consumer confidence rose in January. The consumer confidence index increased to 98.1 from 96.3 in December, beating consensus forecasts for a reading of 96.5.

House prices in the US rose in November compared to the same month last year, according to the S&P/Case-Shiller National Home Price Index. The S&P/Case-Shiller 20-City Composite index was up 5.8% on the year compared with a 5.5% increase in October. This beat economists’ expectations for a 5.7% gain and marked the best reading since July 2014.

On the downside of data, Markit’s flash US service purchasing managers’ business index slipped to 53.7 in January from 54.3 in December. This signalled the slowest expansion of service sector output since December 2014 and fell short of economists’ expectations for a reading of 54. Nevertheless, it was above the 50 level that signals an expansion in sector activity.

Elsewhere, the Shanghai Composite Index fell 6.4% to 2,749.79 at the close, dragging down the rest of Asian stocks, amid worries that capital outflows will accelerate as the economy slows and the yuan devalues. The falls came despite the People’s Bank of China flooding the system with cash to keep borrowing costs in check ahead of the Lunar Holiday.

On the company front, mining stocks advanced on the oil price recovery and an increase in metal prices including a 1.24% jump in gold, a 1.52% gain in silver and 1.78% rise in copper. Anglo American, Glencore, Antofagasta, Fresnillo and Rio Tinto were among the risers.

Shares in Tesco gained despite the UK grocery watchdog finding the supermarket “seriously breached” a legally-binding code to protect suppliers by prioritising its own finances rather than treating its suppliers fairly

Lloyds Banking Group and Royal Bank of Scotland swung higher after UBS rated the banks at ‘buy’ as it re-initiated coverage on the five largest UK banks, backed by new models and analytical support.

easyJet flew lower after saying the Sharm el-Sheikh disaster and the Paris attacks hurt revenues in the three months to 31 December.

PZ Cussons tumbled after reporting a dip in reported revenue and drop in pre-tax profit , reflecting foreign exchange headwinds.

Dixons Carphone slumped after lifting profit guidance slightly above consensus forecasts and saying it will go ahead with the full roll-out of stores in the US. The group reported like-for-like sales were up 5% in the third-quarter, with an all-time record day on Black Friday as the FTSE 100 electronics retailer said it now expected profit before tax to range between £440m and £450m for the full year.

Crest Nicholson was up after the housebuilder beat profit expectations for the full year on sales revenues rising 26% to £804.8m and said it was confident of meeting its target of £1bn for the new financial year.

Carpetright plunged after management cut profit margin guidance and revealed sales slowed in recent weeks.

Market Movers

FTSE 100 (UKX) 5,917.29 0.69%
FTSE 250 (MCX) 16,183.20 0.22%
techMARK (TASX) 3,122.92 0.12%

FTSE 100 - Risers

Anglo American (AAL) 253.50p 11.87%
Glencore (GLEN) 87.10p 7.73%
Fresnillo (FRES) 694.50p 5.55%
Rio Tinto (RIO) 1,690.00p 5.03%
Randgold Resources Ltd. (RRS) 4,821.00p 4.90%
BHP Billiton (BLT) 666.70p 4.20%
Antofagasta (ANTO) 378.20p 4.13%
Royal Bank of Scotland Group (RBS) 260.50p 3.66%
Aberdeen Asset Management (ADN) 232.80p 3.15%
Tesco (TSCO) 160.50p 3.08%

FTSE 100 - Fallers

easyJet (EZJ) 1,584.00p -2.88%
Shire Plc (SHP) 4,139.00p -2.54%
Mondi (MNDI) 1,162.00p -2.52%
Provident Financial (PFG) 2,848.00p -2.37%
Dixons Carphone (DC.) 456.50p -2.27%
Kingfisher (KGF) 317.40p -2.01%
Intu Properties (INTU) 289.30p -1.70%
Merlin Entertainments (MERL) 407.00p -1.45%
Relx plc (REL) 1,174.00p -1.26%
GKN (GKN) 281.60p -1.19%

FTSE 250 - Risers

Tullow Oil (TLW) 156.10p 11.26%
Acacia Mining (ACA) 190.10p 7.40%
TalkTalk Telecom Group (TALK) 201.80p 6.21%
Marston's (MARS) 159.90p 6.10%
NMC Health (NMC) 844.00p 5.90%
NCC Group (NCC) 323.50p 5.24%
Crest Nicholson Holdings (CRST) 538.50p 5.07%
Ladbrokes (LAD) 123.00p 4.33%
Petrofac Ltd. (PFC) 749.50p 4.24%
Wood Group (John) (WG.) 617.00p 4.22%

FTSE 250 - Fallers

PZ Cussons (PZC) 248.50p -9.17%
Ocado Group (OCDO) 261.90p -3.54%
Zoopla Property Group (WI) (ZPLA) 208.10p -3.21%
AO World (AO.) 147.50p -2.90%
Genus (GNS) 1,397.00p -2.51%
Auto Trader Group (AUTO) 384.00p -2.44%
Dechra Pharmaceuticals (DPH) 1,005.00p -2.43%
Smith (DS) (SMDS) 362.70p -2.18%
DFS Furniture (DFS) 315.10p -2.17%
Nostrum Oil & Gas (NOG) 289.80p -2.09%