London open: Stocks rally on oil price recovery, Draghi's remarks

UK stocks advanced on Friday after oil prices recovered and European Central Bank President Mario Draghi hinted at further stimulus.

Oil prices rebounded back above the $30 per barrel level in morning trade. Brent crude jumped 4.45% to $30.61 per barrel and West Texas Intermediate increased 3.5% to $30.63 per barrel at 0853 GMT.

Draghi on Thursday said that amid recent falls in oil prices inflation would remain very low or negative in coming months. While the ECB left key rates unchanged, Draghi said the monetary authority would reconsider its monetary policy at its early March meeting when macroeconomic projections became available.

“Of course there is a risk that in being so dovish he could well be setting himself up for the similar sort of disappointment that characterised the December decision, given that the opposition to further cuts in the deposit rate and further stimulus are hardly likely to have dissipated by then,” said Michael Hewson, chief market analyst at CMC Markets.

“What is not in doubt is that the latest inflation projections are likely to show that inflation will take longer to return to target when they are published in March, but will they be enough to sway the doubters on the council to fall in line and back further action, if it is felt it is necessary.”

In economic data, Friday’s focus will be on UK retail sales data at 0930 GMT. Analysts expect retail sales rose 3.5% in December compared to the same month a year ago.

The last report from the Office for National Statistics revealed a 3.9% increase in November, boosted by Black Friday sales.

On a month-on-month comparison, retail sales are forecast to fall 0.3% in December following a 1.7% gain in November.

Bank of England official Jon Cunliffe speaks at Bruegel in Brussels at 1200 GMT.

Elsewhere, US existing home sales figures will be released on Friday. Analysts estimate sales rose 9.2% in December from a month ago, following a 10.5% plunge. Markit also releases a batch of manufacturing purchasing mangers’ index figures on the Eurozone and the US.

In company news, office space provider Workspace Group rallied after reporting a 2.3% rise in third quarter rent rolls to £80.8m and saying letting activity picked up “significantly” in the new year.

Close Brothers advanced after saying its loan book rose 4.9% in the five months to the end of December to £6bn, reflecting growth across all of the group’s lending businesses.

Hammerson jumped after saying it has it exchanged contracts with Birmingham City Council to acquire the new Grand Central shopping centre in Birmingham for £335m.

Energy stocks, including Royal Dutch Shell and BG Group, were sitting higher on the oil price rebound

Market Movers

FTSE 100 (UKX) 5,850.81 1.33%
FTSE 250 (MCX) 16,009.06 1.11%
techMARK (TASX) 3,067.55 1.17%

FTSE 100 - Risers

Antofagasta (ANTO) 387.00p 5.91%
Sports Direct International (SPD) 413.20p 3.87%
Royal Dutch Shell 'A' (RDSA) 1,363.00p 3.53%
Royal Dutch Shell 'B' (RDSB) 1,365.00p 3.53%
BG Group (BG.) 961.20p 3.06%
WPP (WPP) 1,465.00p 2.88%
Burberry Group (BRBY) 1,186.00p 2.86%
BT Group (BT.A) 478.30p 2.72%
BHP Billiton (BLT) 659.70p 2.63%
Dixons Carphone (DC.) 455.40p 2.48%

FTSE 100 - Fallers

Pearson (PSON) 754.50p -2.27%
Glencore (GLEN) 81.25p -1.22%
Anglo American (AAL) 246.25p -0.71%
Tesco (TSCO) 155.20p -0.54%
SABMiller (SAB) 4,144.00p -0.12%
Prudential (PRU) 1,321.50p 0.04%
Admiral Group (ADM) 1,658.00p 0.06%
Standard Life (SL.) 362.20p 0.11%
Fresnillo (FRES) 663.00p 0.15%
Worldpay Group (WI) (WPG) 300.50p 0.20%

FTSE 250 - Risers

Vedanta Resources (VED) 227.90p 6.79%
Tullow Oil (TLW) 136.70p 5.80%
Petrofac Ltd. (PFC) 738.50p 5.80%
Amec Foster Wheeler (AMFW) 392.70p 4.52%
Allied Minds (ALM) 281.50p 4.26%
Telecom Plus (TEP) 925.00p 4.23%
Virgin Money Holdings (UK) (VM.) 293.80p 3.82%
Workspace Group (WKP) 848.00p 3.60%
Halfords Group (HFD) 377.50p 3.31%
Mitchells & Butlers (MAB) 279.00p 3.10%

FTSE 250 - Fallers

Daejan Holdings (DJAN) 5,850.00p -1.68%
Acacia Mining (ACA) 172.80p -1.59%
Greggs (GRG) 977.00p -1.46%
OneSavings Bank (OSB) 302.60p -1.08%
CLS Holdings (CLI) 1,555.00p -0.89%
Lancashire Holdings Limited (LRE) 600.50p -0.83%
BH Macro Ltd. GBP Shares (BHMG) 1,985.00p -0.75%
Ocado Group (OCDO) 279.90p -0.71%
Cranswick (CWK) 1,887.00p -0.68%
Computacenter (CCC) 815.50p -0.67%