London close: Stocks follow oil prices higher as OPEC confirms plan to curb output

London stocks closed in the green on Wednesday as oil prices jumped after Saudi Arabia said countries outside of OPEC were prepared to join the cartel’s plans to curb production.

The FTSE 100 ended up 0.31% to 7,021.92 points.

Brent crude jumped 2.3% to $52.90 per barrel and West Texas Intermediate gained 2.7% to $51.73 per barrel at 1637 BST.

Speaking at the Oil and Money conference in London on Wednesday, Saudi Arabia’s energy and industry minister Khalid Al-Falih said talks would continue until OPEC's meeting on 30 November in Vienna. He did not name any countries, Bloomberg reported.

The head of OPEC, Mohammad Barkindo, also spoke at the conference where he confirmed the cartel is committed to implementing a plan to address the global supply glut when it meets in November.

Soothing worries about the oversupplied market elsewhere, official data showed weekly US crude inventories fell last week.

US crude inventories fell by 5.2m barrels to 468.7m barrels in the week to 14 October, the Energy Information Administration said.

Meanwhile, the pound stabilised against the dollar at $1.2297 as Chancellor Philip Hammond dismissed claims the government is seeking to influence the Bank of England in its policy decisions.

“There will be no change in monetary policy…Monetary policy is independently determined, that will continue to be the case,” Hammond told the Treasury Select Committee.

He also told MPs downbeat Treasury forecasts about Brexit earlier this year have proved to be invalid.

Hammond claimed that trade deals with other countries should become a much faster process once the UK leaves the EU. However, he declined to comment on whether the nation wanted to remain in the customs union following reports Cabinet members have been warned that leaving the arrangement could risk a 4.5% fall in GDP by 2030.

In other UK news, the Office for National Statistics said the number of people in work rose by 106,000 between June and August, down from gains of more than 170,000 in the previous three readings. Analysts had expected a 70,000 increase in extra jobs.

The unemployment rate remained at 4.9%, as expected. However, the number of people out of work rose by 10,000, the first rise since the three months to February.

Average weekly earnings increased 2.3%, also as forecast, following upwardly revised 2.4% growth in the prior period.

In September, jobless claims rose less than expected, up 700 compared to estimates of 3,200.

“We suspect both the economy and the labour market will be increasingly pressurised by mounting uncertainties over the coming months - particularly once the government triggers Article 50 (due by end-March) and likely very difficult negotiations with the EU come increasingly to the forefront,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“We also expect growth to slow as consumer purchasing power is increasingly squeezed.”

In China, industrial production rose 6.1% in September from a year ago, less than the 6.4% increase expected and after a 6.3% gain in August. Retail sales in the nation edged up 10.7% year-on-year in September, as expected, following a 10.6% rise a month earlier.

China’s gross domestic product steadied at 6.7% growth in the third quarter, in line with expectations.

On the company front, housebuilders were the best performers following an upbeat note on the sector by Barclays, which upped its price targets across the board.

The bank pointed out that aside from a brief spike in cancellations in the aftermath of the EU referendum vote - largely confined to London and its commuter towns - housebuilders continue to trade well.

Persmimmon, Taylor Wimpey and Barratt Developments were all in the black.

Luxury retailer Burberry was also on the front foot, rebounding from losses on Tuesday following the release of its second-quarter results.

Barclays traded higher after Investec upgraded the stock to ‘buy’ from ‘hold’ and lifted the price target to 200p from 195p.

On the downside, builders’ merchant Travis Perkins was under the cosh after it warned it would miss its 2016 profit forecasts and announced the closure of 30 branches.

Consumer goods giant Reckitt Benckiser retreated as its third-quarter sales fell short of expectations and it downgraded its outlook for the year.

BT Group was weaker after Deutsche Bank cut its price target on the stock to 345p from 370p.

Market Movers

FTSE 100 (UKX) 7,021.92 0.31%
FTSE 250 (MCX) 18,040.53 0.26%
techMARK (TASX) 3,527.00 -0.28%

FTSE 100 - Risers

Burberry Group (BRBY) 1,462.00p 4.21%
Persimmon (PSN) 1,778.00p 3.31%
Tesco (TSCO) 214.85p 3.14%
Morrison (Wm) Supermarkets (MRW) 229.20p 2.92%
Next (NXT) 4,873.00p 2.72%
Taylor Wimpey (TW.) 150.50p 2.59%
Capita (CPI) 618.00p 2.49%
Anglo American (AAL) 1,054.50p 2.43%
Randgold Resources Ltd. (RRS) 7,110.00p 2.16%
Pearson (PSON) 761.00p 2.15%

FTSE 100 - Fallers

Travis Perkins (TPK) 1,422.00p -4.44%
Reckitt Benckiser Group (RB.) 7,135.00p -2.62%
Hikma Pharmaceuticals (HIK) 1,984.00p -1.29%
AstraZeneca (AZN) 4,940.50p -1.23%
BT Group (BT.A) 380.00p -1.21%
Wolseley (WOS) 4,468.00p -1.19%
Whitbread (WTB) 3,803.00p -1.02%
Provident Financial (PFG) 2,988.00p -0.99%
Vodafone Group (VOD) 223.95p -0.97%
Informa (INF) 670.50p -0.96%

FTSE 250 - Risers

Computacenter (CCC) 745.50p 5.67%
Crest Nicholson Holdings (CRST) 429.00p 5.17%
Bellway (BWY) 2,496.00p 4.61%
Rentokil Initial (RTO) 235.20p 4.35%
Telecom Plus (TEP) 1,225.00p 4.34%
Shawbrook Group (SHAW) 239.20p 3.91%
Hochschild Mining (HOC) 275.40p 3.85%
Cineworld Group (CINE) 576.50p 3.69%
Countrywide (CWD) 205.70p 3.58%
Euromoney Institutional Investor (ERM) 994.50p 3.54%

FTSE 250 - Fallers

Laird (LRD) 158.40p -48.65%
SIG (SHI) 112.60p -3.68%
IP Group (IPO) 143.30p -2.85%
Morgan Advanced Materials (MGAM) 289.10p -2.82%
JRP Group (JRP) 129.30p -2.78%
Man Group (EMG) 122.20p -2.24%
GVC Holdings (GVC) 709.00p -2.21%
Essentra (ESNT) 518.00p -1.99%
Auto Trader Group (AUTO) 374.60p -1.94%
TalkTalk Telecom Group (TALK) 207.00p -1.90%