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By Michael Hunter
Published: May 17 2011 09:15 | Last updated: May 17 2011 10:58
The FTSE 100 found support toward the bottom of its current trading range again on Tuesday, with stable crude prices leading to demand for oil majors.
It rose 4 points on the session to 5,927.54 having hit an intraday low of 5,890.6, around the nadir reached in mid March. Since then, the FTSE 100’s lowest closing reading has been 5,858.32, reached on April 18. Although it has approached that level in intraday trade, it has consistently found support to close above it.
EDITOR’S CHOICE
London small caps: Cineworld seen to flicker - May-16
Speculators suffer Footsie’s third day of falls - May-13
London small caps: Asos out of fashion - May-13
Industrial data point to flagging recovery - May-12
Small caps: Chariot Oil lifted by Namibia find - May-12
BT enjoys revival as profits leap 71% - May-12
This time, firmer crude prices helped coax oil majors onto the leaderboard, helping traders shrug off confirmation of the demise of BP’s controversial share-swap deal with Rosneft . BP rose 1.1 per cent to 443.6p after four consecutive sessions of losses for the stock as traders sold it in anticipation of the news. BG Group was 1.6 per cent higher at £13.61. News of record production at Essar Energy helped it to the top of the leaderboard, up 4.3 per cent to 430p.
Pressure on financial stocks also eased as traders kept watch on the second day of the meeting of European finance ministers in Brussels, hoping for signs of an accord to deal with any further assistance needed in Athens to deal with Greece’s troubled fiscal position.
“A ‘reprofiling’ of Greek bond maturities was one of the options discussed in a package that is likely to focus on further deficit-cutting measures as well as an expansion and speeding up of Greece’s privatisation programme,” said Gary Jenkins head of fixed income research at Evolution Securities.
Before it came, financial stocks ticked higher, recovering modest intraday losses. Barclays rose 0.6 per cent to 274.9p. Royal Bank of Scotland was 0.5 per cent higher at 42.4p.
Vodafone was among the strongest stocks of the morning – up 2.2 per cent at 171.9p – after a strong reception for the mobile telephone company’s annual results, along with a positive outlook for the rest of the year. Revenues came in just ahead of expectations, rising 3.2 per cent to £45.9bn, stronger than the £45.5bn quoted in consensus forecasts.
Lower down the market, shares in Enterprise Inns fell 4 per cent to 84.9p and to the bottom of the FTSE 250 after it reported interim earnings of $174m, down from £204m in the same period a year ago.
The mid-cap index was flat at 11,939.75 as strength among support services stocks was countered by losses among second-tier financials.
Traders were looking through surprisingly strong UK inflation data. It showed a 1 per cent month-on-month rise in April’s consumer price index – taking it to 4.5 per cent – highlighting the dilemma faced by the Bank of England in dealing with stubbornly high inflation and low economic growth.
Manoj Ladwa, senior trader at ETX Capital said: “Inflation leapt further away from the Bank of England’s target as surging commodities pushed prices increasingly higher. But given the fragility of the economic recovery, the Bank has accepted stubbornly high inflation takes a back seat to economic growth.”
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