London midday: Stocks climb as oil prices rebound

London stocks climbed on Wednesday as oil prices rebounded after Saudi Arabia offered hope of a deal on curbing production in November.

Saudi Arabia’s oil minister Khalid al-Falih said he sees no chance of a production cap at OPEC’s unofficial meeting in Algeria this week. However, he provided optimism of a deal to address the global supply glut at OPEC’s official meeting in November by saying “we need a gentle adjustment to reassure the market”.

Adding to the positive sentiment in the oil market, data from the American Petroleum Institute released late on Tuesday showed a 752,000-barrel drop in crude supplies in the week ended 23 September.

Brent crude rose 0.88% to $46.38 per barrel and West Texas Intermediate increased 0.66% to $44.97 per barrel at 1138 BST.

Meanwhile, Bank of England official Minouche Shafik said in a speech at Bloomberg’s Most Influential Summit in London that “there is no doubt in my mind that the UK is experiencing a sizeable economic shock in the wake of the referendum”.

Shafik said once Article 50 is triggered and the UK formally leaves the European Union, the prospect of trade barriers will hurt economic growth.

Elsewhere, European Central Bank President Mario Draghi urged governments to implement structural reforms at the first ECB Annual Research Conference in Frankfurt.

“…we know that if interest rates are to rise safely away from the lower bound, we need structural reforms to raise potential output in the euro area and boost long-run interest rates,” he said in a prepared speech.

Still to come, Federal Reserve chair Janet Yellen will testify before the House Financial Services Committee at 1500 BST.

US durable goods orders figures are due at 1330 BST while the Energy Information Administration publishes its US weekly crude inventories data at 1530 BST.

In corporate news, Smiths Group shares jumped as it reported a better-than-expected drop in full year pre-tax profit.

Sainsbury slumped after saying total retail sales fell 0.4% in the 16 weeks to 24 September, with like-for-like retail sales including VAT but excluding fuel down 1.1%. The supermarket blamed industry-wide falling food prices for the decline.

SABMiller shares edged higher as shareholders approved a $100bn takeover offer by Anheuser-Busch InBev.

Anglo American and Rio Tinto rallied as the closure of mines in the Philippines sent metals prices higher.

UK Mail Group surged after Deutsche Post agreed to buy the integrated mail and parcel operator for 440p per share, valuing the company at £242.7m.

Shares in post office rival Royal Mail declined as the deal threatens its dominance over the market.

Market Movers

FTSE 100 (UKX) 6,858.44 0.75%
FTSE 250 (MCX) 17,787.03 0.90%
techMARK (TASX) 3,503.32 0.83%

FTSE 100 - Risers

Sky (SKY) 881.00p 3.95%
Dixons Carphone (DC.) 367.50p 3.06%
Rio Tinto (RIO) 2,533.50p 2.99%
Travis Perkins (TPK) 1,537.00p 2.47%
Smiths Group (SMIN) 1,419.00p 2.31%
Anglo American (AAL) 937.40p 2.25%
BHP Billiton (BLT) 1,101.00p 2.18%
Taylor Wimpey (TW.) 153.60p 2.06%
Barratt Developments (BDEV) 494.00p 2.02%
ITV (ITV) 187.40p 2.01%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 242.20p -3.43%
Royal Mail (RMG) 488.80p -2.82%
Centrica (CNA) 222.90p -0.31%
Imperial Brands (IMB) 3,968.00p -0.30%
Shire Plc (SHP) 5,129.00p -0.27%
Severn Trent (SVT) 2,480.00p -0.24%
Associated British Foods (ABF) 2,593.00p -0.23%
Burberry Group (BRBY) 1,400.00p -0.21%
Land Securities Group (LAND) 1,051.00p -0.19%
Babcock International Group (BAB) 1,077.00p -0.19%

FTSE 250 - Risers

Kennedy Wilson Europe Real Estate (KWE) 986.50p 4.50%
Tullow Oil (TLW) 225.40p 4.21%
Petrofac Ltd. (PFC) 846.00p 3.74%
Phoenix Group Holdings (DI) (PHNX) 867.00p 3.40%
Brewin Dolphin Holdings (BRW) 271.20p 3.12%
Morgan Advanced Materials (MGAM) 284.70p 3.04%
Grafton Group Units (GFTU) 483.20p 3.03%
Vesuvius (VSVS) 351.60p 2.90%
CLS Holdings (CLI) 1,617.00p 2.86%
Marshalls (MSLH) 285.60p 2.84%

FTSE 250 - Fallers

Tritax Big Box Reit (BBOX) 137.50p -4.25%
ICAP (IAP) 462.10p -3.27%
Acacia Mining (ACA) 485.80p -1.92%
Virgin Money Holdings (UK) (VM.) 308.90p -1.84%
Barr (A.G.) (BAG) 509.00p -1.74%
Inmarsat (ISAT) 677.50p -1.53%
International Personal Finance (IPF) 262.00p -1.43%
Tullett Prebon (TLPR) 344.90p -1.29%
Assura (AGR) 56.70p -1.13%
OneSavings Bank (OSB) 257.90p -1.07%