FTSE rides to two month high on oil strength; Ryanair slumps
London's blue-chip stocks climbed to their highest in more than two months on Monday as gains in oil shares and consumer staples offset deep losses in miners, while airline Ryanair slumped after a disappointing quarterly report. The FTSE 100 index was up 0.3 percent at its highest since Dec. 4 at 1014 GMT, extending a five-day winning streak, after the U.S. Fed's cautious stance last week and consensus-busting U.S. jobs data boosted confidence. While FTSE 100 exporter stocks were aided by a weaker pound, the more domestically focussed mid-cap index handed back the day's gains as sterling lost ground, and was roughly flat. The FTSE 100 saw just around a tenth of its average volumes in the first two hours after the bell, as trading was muted with Chinese markets closed for the Lunar New Year. Elsewhere, Asian shares hovered near four-month highs after a mixed performance on Wall Street at the close of last week.
Oil majors Shell (LON:RDSa) and BP (LON:BP) provided the most support for the main bourse with crude prices hitting their highest so far this year on OPEC-led supply cuts and U.S. sanctions against Venezuela's petroleum industry.
Cyclicals, such as miners and banks, led the falls while consumer staples and healthcare stocks such as Unilever (LON:ULVR) and GlaxoSmithKline - which are considered safe havens in times of economic and geopolitical stress - were in favour.
A 1.1 percent decline put miners on course for their worst one-day fall in more than ten days as copper prices fell on concerns about slowing factory activity in China, which is the world's biggest industrial metals consumer. London-listed shares in Ryanair slumped 4.5 percent after Europe's biggest budget airline blamed falling fares for its quarterly loss and warned that overcapacity was likely to continue to pressure prices.
The report dragged rival easyJet (LON:EZJ) down 1 percent.
Flybe jumped 10 percent after it agreed to demands from its largest shareholder to call a general meeting to consider replacing Chairman Simon Laffin following the cut-price sale of the British regional airline. On the midcaps, iron ore pellet producer Ferrexpo slumped 9.4 percent after it said its auditors received bank statements from a charity, which was set up mainly to coordinate its corporate social responsibility programme, that contained "as yet unexplained discrepancies".
Ferrexpo was the worst mid-cap faller and the losses placed it on track for steepest one-day declines in six months.
In single stock moves, supermarket chain Morrisons advanced nearly 2 percent to be among top FTSE 100 gainers after Citigroup (NYSE:C) raised the rating to "neutral". A survey by accountants Deloitte found that major British businesses' appetite to take on financial risk has fallen to its lowest level in nearly a decade due to fears of "the hardest of Brexits" and rising U.S. protectionism. Worries about Brexit were exacerbated by Nissan's announcement over the weekend that it had scrapped plans to build its new X-Trail SUV in Britain, and its warning that uncertainty over Britain's departure was making it harder to plan for the future.
"The Nissan cancellation was a blow and reflects the underlying reality that Brexit uncertainty inexorably impacts medium/longer-term business confidence and hence related investments," said Raymond James analyst Chris Bailey.