Sector movers: Oil price rise improves London market fortunes

Resource stocks remained under pressure on Tuesday, but an uptick in oil prices alongside a strong performance by financial services stocks saw the London market close proceedings on a positive note.

The FTSE 100 ended 2.45% or 134.73 points higher at 6,017.79 points, while the FTSE 250 was 1.35% or 226.99 points higher at 16,999.56, as oil futures rose, extending gains made late in the previous session, even though Brent continues to lurk near seven-year lows.

At 1651 GMT, the Brent front-month futures contract was up 1.56% or 59 cents at $38.51 per barrel, still close to price levels last seen in December 2008. Concurrently, WTI was up 2.15% or 78 cents at $37.09 per barrel.

Away from the oil market, most metal futures headed lower during late afternoon trading in Europe. At 1635 GMT, three-month delivery contracts of primary aluminium (down 1.3%), tin (down 0.3%), lead (down 0.4%), nickel (down 0.9%) and zinc (down 2.2%) were firmly in negative territory on the London Metal Exchange.

Copper contract also remained under pressure trading down 2.4% at $4,569.00 per metric tonne. Meanwhile, the precious metal complex felt the heat with traders pricing in a US interest rate hike.

COMEX gold futures contract was down by another 0.32% or $3.40 to $1,060.00 an ounce, while spot gold was 0.50% or $5.33 higher at $1,065.19 an ounce. COMEX silver was broadly flat, up 0.11% or two cents, at $13.71 an ounce; however spot platinum showed resistance with a rise of 0.81% or $6.90 to $855.25 an ounce.

Invariably, resource stocks remained under pressure with Anglo American (down 3.45%), Fresnillo (down 0.83%) and Randgold Resources (down 0.45%) being the only three blue chips to end the session in negative territory. However, FTSE 100 peer Glencore jumped after JPMorgan upgraded the stock to ‘overweight’ from ‘neutral’ with an unchanged target price of 160p.

Financials had a positive session with Schroders (up 5.75%) leading the way, while Old Mutual (up 5.32%) continued to rebound after last week's losses due to political issues in South Africa. The country’s president unexpectedly sacked finance minister Nhlanhla Nene, replacing him with relatively unknown David van Rooyen.

Sainsbury’s (up 5.23%) continued to thwart its rivals in recent weeks, increased sales and grew its market share as Tesco, Asda and Morrisons all saw sales fall.

Finally, Coca-Cola HBC AG was also among the blue chip risers as the bottling company revealed it had purchased 100,000 of its shares for an average price of 1,433.66p on 12 December and cancelled them.