London close: FTSE closes higher after Yellen's remarks, oil price recovery

The FTSE 100 closed higher on Wednesday after a rebound in oil prices and dovish comments from Federal Reserve Chair Janet Yellen.

London’s top tier index ended up 1.59% to 6,203.17 points.

Oil prices regained strength as the Energy Information Administration revealed US crude stocks rose less than expected last week. Crude inventories grew by 2.3 million barrels in the last week, compared with analysts' expectations for an increase of 3.3 million barrels.

It followed a report by the American Petroleum Institute late on Tuesday which showed US crude stocks rose by 2.6 million barrels last week to 534.4 million, which was less than the 3.3 million analysts had expected.

Brent crude increased 2.4% to $40.12 per barrel and West Texas Intermediate climbed 2.4% to $39.26 per barrel at 1636 BST.

Meanwhile, investors continued to weigh Yellen’s speech at the Economic Club of New York on Tuesday.

Yellen said the central bank would move cautiously when it came to further interest rate hikes, striking a dovish tone that contrasted greatly with the hawkish comments last week from San Francisco Fed President John Williams, Atlanta Fed President Dennis Lockhart and St Louis Fed President James Bullard.

The Fed Chair highlighted global economic uncertainty, including the slowdown in China and sliding oil prices as reasons behind the Fed’s decision not to hike in January or March and said there would be “only gradual increases” going forward.

Chicago Fed President Charles Evans on Wednesday said he supported the forecast of two rate hikes this year and would be open to more increases if the labour market continued to show improvement.

In an interview with CNBC, he said further declines in the unemployment rate would be a good reason to raise interest rates. However, he suggested a hike in April was would be too soon amid low inflation.

IG’s senior market analyst Chris Beauchamp said Evans’s remarks were overshadowed by Yellen’s speech as the market “prefers to believe his boss”.

Evans’s comments come ahead of the all-important US non-farm payrolls report which Societe Generale expects to show an increase of 217,000 in March, up from 214,000 in February.

The ADP on Wednesday said the private sector in the US added 200,000 jobs in March, beating expectations of 195,000 jobs but marking a deceleration from the previous month’s 214,000 jobs.

In corporate news, heavily-weighted miners put in a stellar performance as the dollar weakened following Yellen’s speech. Anglo American, Glencore, BHP Billiton, Rio Tinto and Antofagasta were all firmly in the black.

Low-cost carrier EasyJet was flying lower, giving back some of the gains it made in the previous session after Bank of America Merrill Lynch upgraded the stock to ‘buy’.

Sports Direct was higher after it raised its stake in Findel to nearly 30%.

William Hill was in the red after Morgan Stanley downgraded it to ‘underweight’ from ‘equalweight’ and cut the price target to 290p following the company’s profit warning last week.

Market Movers

FTSE 100 (UKX) 6,203.17 1.59%
FTSE 250 (MCX) 16,975.56 1.31%
techMARK (TASX) 3,134.29 1.30%

FTSE 100 - Risers

Anglo American (AAL) 535.70p 11.81%
Standard Chartered (STAN) 472.10p 7.43%
Rio Tinto (RIO) 1,980.00p 6.28%
BHP Billiton (BLT) 793.60p 5.81%
Glencore (GLEN) 151.50p 5.35%
Coca-Cola HBC AG (CDI) (CCH) 1,506.00p 4.66%
Carnival (CCL) 3,692.00p 4.00%
Burberry Group (BRBY) 1,370.00p 3.87%
Royal Dutch Shell 'A' (RDSA) 1,709.50p 3.61%
TUI AG Reg Shs (DI) (TUI) 1,028.00p 3.37%

FTSE 100 - Fallers

Worldpay Group (WI) (WPG) 272.00p -1.16%
Next (NXT) 5,575.00p -1.06%
London Stock Exchange Group (LSE) 2,820.00p -0.46%
Berkeley Group Holdings (The) (BKG) 3,254.00p -0.40%
easyJet (EZJ) 1,520.00p -0.33%
Babcock International Group (BAB) 945.50p -0.32%
Lloyds Banking Group (LLOY) 67.80p -0.29%
Rexam (REX) 632.50p -0.16%
Persimmon (PSN) 2,102.00p -0.14%
ITV (ITV) 243.30p -0.00%

FTSE 250 - Risers

Aberdeen Asset Management (ADN) 279.70p 9.00%
Evraz (EVR) 89.70p 8.60%
Vedanta Resources (VED) 333.70p 6.61%
Petrofac Ltd. (PFC) 917.50p 5.46%
Euromoney Institutional Investor (ERM) 988.50p 5.33%
International Personal Finance (IPF) 289.10p 4.94%
Kaz Minerals (KAZ) 165.10p 4.49%
Allied Minds (ALM) 479.40p 4.42%
Melrose Industries (MRO) 369.20p 4.38%
Amec Foster Wheeler (AMFW) 447.50p 4.36%

FTSE 250 - Fallers

Dunelm Group (DNLM) 895.00p -3.40%
Ted Baker (TED) 2,733.00p -2.53%
NMC Health (NMC) 1,032.00p -2.37%
UDG Healthcare Public Limited Company (UDG) 587.00p -1.59%
Lancashire Holdings Limited (LRE) 535.50p -1.56%
Vectura Group (VEC) 163.70p -1.39%
Just Retirement Group (JRG) 152.20p -1.36%
William Hill (WMH) 330.80p -1.17%
Daejan Holdings (DJAN) 5,665.00p -1.13%
Debenhams (DEB) 73.25p -1.01%