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London open: BP, Shell pace gains as oil surges on OPEC+ cut
London stocks rose in early trade on Monday, underpinned by surging oil prices.
At 0820 BST, the FTSE 100 was up 0.6% at 7,676.69.
Over the weekend, OPEC+ unexpectedly announced it would cut output by 1.1m barrels a day from next month, sending oil prices surging. Brent crude rose 5.6% to $84.12 a barrel, while West Texas Intermediate was 5.3% firmer at $79.69.
Richard Hunter, head of markets at Interactive Investor, said: “Markets in the UK opened the new quarter on the front foot, with the spike in the oil price boosting the shares of BP and Shell, in turn adding several points to the FTSE 100 given the size of the index’s exposure to the oil and gas sector.
“Indeed, there was a more general feel of a measured return to a risk-on approach, with some strength also seen in the miners and the more recently beleaguered banking stocks. The index as a whole is currently up by 3% in the year to date, albeit off first quarter highs, and is trying to re-establish the strength of its recent performance.
“Its exposure to stable, cash generative and to some extent inflation-proof sectors, coupled with a sprinkling of defensive stocks and an average overall dividend yield of 3.7% ticks many boxes for the more cautious investor, including those from overseas who also appreciate the global exposure which the index provides.”
Investors were also digesting the latest data out of China, which showed that manufacturing activity unexpectedly eased in March.
The Caixin purchasing managers index for the sector, which covers smaller and export-oriented businesses, fell to 50.0 – the level that separates contraction from expansion – from 51.6 in February. Economists were expecting a reading of 51.4.
Both output and new orders rose at softer paces while foreign sales and employment fell. Meanwhile, buying activity rose modestly for the second month.
Pantheon Macroeconomics said: “Today’s set of PMIs point to a risk of China’s recovery losing momentum, while dismal global demand weighs on growth in north-east Asia.”
In equity markets, BP and Shell were the standout gainers on the FTSE 100 index, up 4.4% and 3.8%, respectively.
On the FTSE 250, Tullow Oil, Energean, Hunting and Wood Group also gained.
Elsewhere, NatWest was in focus after the UK government said it has extended plans to sell down its stake in the bank.
UK Government Investments (UKGI), which manages the government’s 41.5% shareholding in the lender, first announced plans to start slowing selling down its stake in July 2021. It was extended last summer until 11 August 2023, and it will now be extended once again, to 11 August 2025.
Cineworld tumbled more than 30% as it said it had ended the sale process for its US, UK and Ireland businesses after failing to find an all-cash buyer. The company also said it has reached a conditional deal with lenders to exit bankruptcy and announced plans to raise $2.26bn (£1.8bn) in new funding.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp Plc | +4.21% | +21.50 | 532.30 |
| 2 |  |
Shell Plc | +4.12% | +95.00 | 2,403.50 |
| 3 |  |
Prudential Plc | +2.72% | +30.00 | 1,132.00 |
| 4 |  |
Barclays Plc | +2.26% | +3.30 | 149.10 |
| 5 |  |
Lloyds Banking Group Plc | +2.20% | +1.05 | 48.73 |
| 6 |  |
Hsbc Holdings Plc | +2.02% | +11.10 | 560.80 |
| 7 |  |
Imperial Brands Plc | +1.58% | +29.50 | 1,893.50 |
| 8 |  |
Bt Group Plc | +1.54% | +2.25 | 148.05 |
| 9 |  |
Land Securities Group Plc | +1.48% | +9.20 | 630.40 |
| 10 |  |
Direct Line Insurance Group Plc | +1.45% | +2.00 | 139.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | -1.55% | -11.40 | 722.80 |
| 2 |  |
Tui Ag | -1.54% | -9.60 | 614.00 |
| 3 |  |
Hiscox Ltd | -1.44% | -16.00 | 1,093.00 |
| 4 |  |
International Consolidated Airlines Group S.a. | -1.41% | -2.13 | 148.85 |
| 5 |  |
Bhp Group Limited | -1.31% | -33.50 | 2,526.00 |
| 6 |  |
Auto Trader Group Plc | -1.23% | -7.60 | 608.60 |
| 7 |  |
Rightmove Plc | -1.17% | -6.60 | 556.40 |
| 8 |  |
Sse Plc | -1.03% | -18.50 | 1,784.50 |
| 9 |  |
United Utilities Group Plc | -0.99% | -10.50 | 1,049.50 |
| 10 |  |
Spirax-sarco Engineering Plc | -0.97% | -115.00 | 11,740.00 |
Monday newspaper round-up: Spending, Credit Suisse, Dr Martens, Arriva
More than half of UK consumers have cut back on discretional spending since the start of the year, with nearly two-thirds choosing to reduce the amount they spend on eating out, according to research from KPMG. As households grapple with a swath of bill increases and tax hikes coming into effect from the start of this month, the survey of 3,000 consumers also found that 49% plan to spend less on non-essentials now that energy bill support payments have come to an end, while 30% will use their savings to cope. – Guardian
Switzerland’s federal prosecutor has launched an investigation into whether last month’s state-backed takeover of the stricken bank Credit Suisse by its bigger rival UBS broke Swiss criminal law. The office of the attorney general said it was looking into potential breaches by government officials, regulators and executives at the two banks who thrashed out an emergency merger over a frantic weekend in mid-March to prevent a wider financial meltdown. – Guardian
Britain must rethink its net zero ban on new petrol and diesel cars after Brussels watered down restrictions across Europe, the chairman of JCB has said. Lord Bamford insisted that “the internal combustion engine certainly has a future”, in comments that will add to pressure for Rishi Sunak to drop a 2030 crackdown on non-electric vehicles. – Telegraph
Dr Martens will start using recycled leather in some of the boots made in its factory in Northampton. The FTSE 250 shoe manufacturer is one of a group of investors set to inject $18 million into Gen Phoenix, a producer of sustainable leather. Other backers include Jaguar Land Rover and Tapestry, the home of luxury brands such as Coach and Kate Spade. – The Times
Arriva is set to become the latest passenger transport company to change hands. The company runs CrossCountry and Chiltern train services for the Department for Transport; the London Overground for Transport for London; its own Grand Central train operator between London and the north of England; and bus services in London and around the country. – The Times
