London close: FTSE boosted by oil majors as prices jump

London markets closed on Monday with a mixed performance, with energy stocks among the major gainers after the weekend’s announcement from OPEC.

The FTSE 100 rose 0.54% to close at 7,673.00, while the FTSE 250 fell 0.26% to end the day at 18,879.41.

OPEC’s surprise announcement of a more-than-one-million-barrel daily cut in production from next month led to a surge in energy prices earlier.

Brent crude futures were last up 6% on ICE at $84.68 per barrel, while the NYMEX quote for West Texas Intermediate was ahead 6.25% at $80.40.

On the currency front, sterling was last 0.45% stronger on the dollar at $1.2393, while it managed gains of 0.04% against the euro to €1.1379.

“It has been a busy start to the second quarter, as markets scramble in the OPEC+ production cut,” said IG chief market analyst Chris Beauchamp.

“Having finished the quarter with signs of slowing inflation, investors are now scrambling to react.

“The FTSE 100 has enjoyed one of the stronger starts to the year, kept in positive territory by BP and Shell, which have added more than 40 points to the index.”

UK manufacturing activity falls amid weaker demand

In economic news, manufacturing activity in the UK fell in March as demand weakened, according to a closely-watched survey from S&P Global/CIPS.

The seasonally-adjusted UK manufacturing purchasing managers’ index (PMI) dropped to 47.9 from February’s seven-month high of 49.3.

That was below both the flash estimate and consensus of 48.0, with the index now below the neutral mark of 50.0 for eight successive months.

The survey revealed that output was reduced in response to subdued market demand and declining new export orders.

Consumer and intermediate goods sectors saw downturns, while investment goods production rose for the second month in a row.

Input inflation eased to its lowest level since June 2020, while vendor lead times improved to the greatest extent in the survey's 31-year history.

“Companies scaled back production in response to subdued market conditions,” said Rob Dobson, director at S&P Global Market Intelligence.

“Although total new orders saw a fractional increase, this followed on from a nine-month sequence of contraction and suggests that order book levels remain low overall.

"There was better news on the price and supply fronts during March, however.”

Meanwhile, eurozone manufacturing activity also fell to a four-month low in March, with S&P Global's final eurozone manufacturing PMI dropping to 47.3 from 48.5 in February.

However, the final eurozone manufacturing output index rose to 50.4 in March, up from 50.1 a month earlier, hitting a 10-month high.

S&P Global attributed much of the decline to the suppliers’ delivery times index surging to a survey record.

In the US, the Institute for Supply Management’s manufacturing sector PMI fell from a reading of 47.7 for February to 46.3 in March, declining more quickly than anticipated.

Consensus had been for a decline to 47.1.

Finally, China's manufacturing activity also unexpectedly eased in March, according to the private Caixin survey.

The manufacturing PMI registered a reading of 50, compared with February’s 51.6.

Caixin said the result highlighted growing doubts about the strength of the Chinese recovery momentum amid an ongoing property downturn and global financial uncertainty.

While buying activity rose modestly for the second month, both output and new orders rose at softer paces, and foreign sales and employment fell.

Energy and banking sectors rise, Cineworld tumbles

On London’s equity markets, BP, Shell, Tullow Oil, Energean, Hunting, and John Wood Group were among the risers as oil prices rose.

Oil majors BP and Shell were standout gainers, rising by 4.29% and 4.18%, respectively.

Banks also advanced, with Barclays, HSBC, Lloyds Banking Group, and Standard Chartered all higher.

NatWest Group was in focus after the UK government said it had extended plans to sell down its stake in the bank.

Meanwhile, Spirent Communications gained after unveiling a £56m share buyback.

On the downside, Cineworld Group tumbled by 32.52% after it said it had ended the sale process for its US, UK, and Ireland businesses.

The company failed to find an all-cash buyer and announced plans to raise $2.26bn (£1.8bn) in new funding while also reaching a conditional deal with lenders to exit bankruptcy.

NCC Group was also under pressure, having crashed on Friday after a profit warning.

Glencore was in the red after Teck Resources said it had received and unanimously rejected an unsolicited takeover approach from the mining firm.

The Canadian diversified natural resources group dismissed the approach as "opportunistic". Glencore’s offer would have seen Teck separated to create two businesses, exposing Teck shareholders to thermal coal and oil trading.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,673.00 0.54%
FTSE 250 (MCX) 18,879.41 -0.26%
techMARK (TASX) 4,531.97 0.08%

FTSE 100 - Risers

BP (BP.) 532.70p 4.29%
Shell (SHEL) 2,405.00p 4.18%
Imperial Brands (IMB) 1,907.00p 2.31%
Centrica (CNA) 108.25p 2.07%
Barclays (BARC) 148.26p 1.69%
Land Securities Group (LAND) 630.80p 1.55%
Standard Chartered (STAN) 623.00p 1.43%
Coca-Cola HBC AG (CDI) (CCH) 2,244.00p 1.40%
HSBC Holdings (HSBA) 556.40p 1.22%
Endeavour Mining (EDV) 2,022.00p 1.20%

FTSE 100 - Fallers

Glencore (GLEN) 452.50p -2.60%
M&G (MNG) 193.20p -2.42%
United Utilities Group (UU.) 1,035.50p -2.31%
International Consolidated Airlines Group SA (CDI) (IAG) 147.50p -2.30%
Ocado Group (OCDO) 524.00p -2.06%
JD Sports Fashion (JD.) 174.15p -2.03%
Severn Trent (SVT) 2,824.00p -1.91%
Burberry Group (BRBY) 2,537.00p -1.89%
Next (NXT) 6,452.00p -1.83%
Beazley (BEZ) 587.50p -1.67%

FTSE 250 - Risers

Hunting (HTG) 252.00p 6.36%
Tullow Oil (TLW) 33.44p 6.02%
Harbour Energy (HBR) 290.10p 5.72%
Ithaca Energy (ITH) 157.00p 5.02%
Energean (ENOG) 1,358.00p 3.84%
Just Group (JUST) 88.30p 2.85%
Target Healthcare Reit Ltd (THRL) 72.00p 2.85%
Genuit Group (GEN) 286.50p 2.69%
Urban Logistics Reit (SHED) 131.40p 2.66%
Wood Group (John) (WG.) 204.60p 2.30%

FTSE 250 - Fallers

NCC Group (NCC) 94.10p -7.93%
Man Group (EMG) 220.10p -6.50%
Wizz Air Holdings (WIZZ) 2,830.00p -4.81%
Vanquis Banking Group 20 (VANQ) 228.00p -3.88%
Kainos Group (KNOS) 1,333.00p -3.55%
Future (FUTR) 1,118.00p -3.54%
Watches of Switzerland Group (WOSG) 792.00p -2.88%
Carnival (CCL) 713.20p -2.86%
Moneysupermarket.com Group (MONY) 242.20p -2.73%
Hammerson (HMSO) 25.56p -2.72%