FTSE 100 hits three-week high.
Roll out the brandy butter and put on the party hats.
The London stock market has closed, and won’t reopen until Tuesday 28th.
It was a fairly subdued day’s trading, in truth. The FTSE 100 index of blue-chip shares has closed 13 points higher at 6254, a gain of 0.2%. Investors didn’t have much more to give, after driving shares up strongly yesterday.
Trading volumes were thin – with just 110 million shares bought and sold, compared to almost 600m yesterday.
But that’s still the highest close on the FTSE 100 since December 3rd. Not an epic Santa Rally, but better than a cold snowball in the face.
International packaging firm Mondi topped the FTSE 100 leaderboard – which rather sums up the humdrum nature of today’s trading session.
It was followed by BP, boosted by the recent recovery in the oil price, and mining firm Anglo American, which announced the sale of a coal mine in Australia to bolster its cash reserves.
London outperformed the rest of Europe – at least those parts where stock markets were still open. Over in Paris, the CAC 40 closed down 0.3%, or 15 points, at 4659.
Germany’s Frankfurt bourse remained closed – a sensible decision, it turns out.
Chris Beauchamp, senior market analyst at IG, sums up the mood:
Volumes are thin across Europe today, with some markets already shut for the holidays.
However, in London the session has seen the FTSE 100 add some small gains to its tally for the week, having seen a decent bounce over the last two days. Even now, miners are in the news, having dominated the agenda so much of late. Anglo American has managed to add some small change to its dwindling cash pile as it sells off a coal mine in Australia – disposals were a key theme for miners in recent months, and the fire sale will continue into the New Year.
It has not been a great year for the FTSE 100, which is currently down almost 5% since January, with the FTSE 250 coming out with an 8% gain so far.
And with that, dear readers, I have an appointment with Oxford Street. Hope you have a super Christmas. See you again soon. GW
Love him or hate him, Yanis Varoufakis was undoubtedly one of the key figures of this year.
Some see the former Greek finance minister as a valiant champion of anti-austerity polities, others blame him for driving Greece back into recession, capital controls and a tough third bailout.
As the man himself tells the Guardian:
“I regret that we were a failure. A heroic failure, but a failure nonetheless.”
And with Varoufakis planning to launch a new political movement soon, we’ll surely hear more from him in 2016. Here’s our profile:
Marks & Spencer is feeling the pre-Christmas love…. its shares are now up 1.1%.
They have fallen more than 10% this month, pushed down by fears that it might struggle this Christmas.
So much for the oil price rebounding…. Brent crude is now down 1%, as its early gains evaporate.
Conner Campbell of SpreadEx says the markets look rather weary today, after posting a 2% jump on Wednesday
Heading into the Christmas break with all the enthusiasm of someone who has received the ugliest jumper imaginable, the markets are failing to capitalise on yesterday’s super surge.
Trading volumes in the City are exceptionally light.
Just 73 million shares have changed hands so far – compared to an average of 588 million over the last few days. You’d almost think investors were busy getting ready for Christmas….
Raindrops are now slouching their way down the windows of City offices, helping to dampen festive spirits among traders who made the trip into work.
European markets are generally under a cloud too, with the Stoxx 600 index (which tracks the 600 biggest companies in Europe) now down 0.2%.
Rather like a festive reveller*, the London stock market is stumbling as it enters the final lap before Christmas.
The FTSE 100 is now up a measly 1 point, with one hour to go until the early Christmas finish. And oil’s early rally is fizzling out too….
* – or so I hear….
Rather like the Ghost of Christmas Past, former Greek finance minister Yanis Varoufakis has made a festive appearance…..and dished out some rather unfestive comments.
Speaking to Dutch newspaper de Volkskrant, Varoufakis claimed that Greece’s eurozone partners had deliberately forced the country into a third bailout by refusing to engage with the reforms he proposed.
As Varoufakis put it:
“It was a pure coup, one big coup. And that has succeeded
As regular readers know all too well, the Greek saga played out at a series of crunch meetings in Brussels between Yanis and his fellow finance ministers.
And he tells de Volkskrant that Germany’s representative, Wolfgang Schäuble, was to blame.
He’s the puppet master who pulls all the strings. All the other ministers are marionettes. Schäuble is the grandmaster of the Eurogroup. He decides who becomes the president, he determines the agenda, he controls everything.”
In contrast, eurogroup president Jeroen Dijsselbloem is dismissed as “a soldier, a puppet …
He can’t make any decisions without calling Schäuble.”
Here’s the full piece (in Dutch).
And lo, there appeared some economic news….
The number of UK mortgages approved in November has jumped by a fifth year-on-year, to 44,960.
That’s a slight slowdown on October’s 45,463, but suggests demand for housing remains robust.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says there’s no sign of the mortgage market slowing down:
It’s been a busy year for many brokers as borrowers take advantage of exceptionally low mortgage rates and seek guidance through the more complicated application process created by the Mortgage Market Review.
‘Remortgaging numbers in particular are rising, as borrowers wonder whether 2016 will finally bring that first interest rate rise for several years. While we are not convinced it will, those who would struggle to pay their mortgage if rates rise should consider a fixed rate. There are still some excellent deals to tempt borrowers although we may have seen the back of the very cheapest products.
Despite today’s rally, Brent crude is still almost 50% lower than in May when it traded hands at $69 per barrel.
This chart, via CMC’s Jasper Lawler, shows how the amount of oil in storage climbed this year, forcing producers to cut the number of rigs in use:
It all started 13 months ago, when the Opec cartel decided to leave production levels unchanged in an apparent attempt to drive rivals out of business.
As Jasper points out, this cunning wheeze hasn’t really worked yet:
OPEC’s wily plan to keep supplying the market with oil, drive prices to a level that will bankrupt the competition, which will in turn reduce output and lead to price recovery is taking a little longer than first imagined.
Just like its meeting over a year ago, the latest meeting of the Organisation of Petroleum Exporting Counties (OPEC) in December sent the oil price to new multi-year lows. This time OPEC failed to even agree on a quota. An apparent row between Saudi Arabia and Iran has led to the removal of any kind of production ceiling, which previously stood at 30m bpd.
So at least until the next OPEC meeting in the summer, oil prices must reflect no production ceiling. Oil plummeted 40% after OPEC’s decision in November 2014; an equivalent percentage plunge from the time of the December 2015 meeting would take it to around $25 per barrel.
The Russian government will be pleased to see the oil price rallying this morning, given its reliance on crude exports.
The Russian currency has now dipped below 70 rubles to the US dollar, having hit a record low of 71.17 earlier this week.
As this chart shows, the ruble has been through a torrid year, matching the slumping in the oil price:
Russia’s latest budget is based on an oil price of $50 per barrel, which looks rather optimistic given the current prices.
Analysts believe Moscow can cope, unless the rouble weakens by another third or so….
Sergey Narkevich, an analyst at Promsvyazbank PJSC in Moscow, told Bloomberg that:
“It would take more than 90 rubles per dollar to provoke significant repercussions.”
Shares in UK retailers are mainly down this morning, reflecting concerns that the festive period may not have been as merry as they’d like.
Kingfisher, the parent company of Argos and Homebase, was leading the FTSE 100 fallers in early trading, down 1.3%. Tesco has lost 1%.
And in the FTSE 250 index of smaller companies, online retailer AO World are down 2%, followed by fashion chain Ted Baker (-1.4%) and cars-to-bikes firm Halfords (-1.4%).
The retail sector was rocked by yesterday’s profits warning from Game Digital. Its shares are down 4% today, having slumped by 40% on Wednesday after it admitted that demand for new console games was disappointing.
Retailers will now be hoping that the prospect of bargains will get people shopping.
As analyst Nick Bubb says:
Apart from the wild-eyed men traditionally spotted in the perfume halls of the big department stores today, few people will need to pay full price for anything in the shops today and Online shoppers will be able to get stuck into the John Lewis Clearance Sale from 5pm onwards…
Oil shares rise in London
Europe’s stock markets have opened rather cautiously today.
After surging by more than 150 points on Wednesday, Britain’s FTSE 100 has gained an extra 12 points at the open to 6253, a rise of 0.2%
Oil companies are among the risers, with BP and Royal Dutch Shell both up around 1%.
The French stock market has dipped by 0.2%, on what already feels like a quiet trading session.
Tony Cross, market analyst at Trustnet Direct, reckons that “pre-Christmas party fatigue” is kicking in….
Volumes are expected to be thin over the next few hours, whilst data that might actually deliver any meaningful direction is also going to be hard to come by.
A mince pie for Augustin Eden of Accendo Markets, who says that traders are “getting into the petroleum spirit of Christmas” today as they push oil higher.
The rising oil price has helped push shares higher in Australia, where the stock market enjoyed a pre-Christmas bounce.
The S&P/ASX 200 index jumped by 1.2%, its seventh consecutive day of gains.
Energy shares led the rally, on relief that oil prices were bouncing back from their 11-year lows:
The oil price is also benefitting from the news that US oil drillers reined in production last week.
There were just 538 oil rigs in active service this week, three fewer than the previous week, according to the latest Baker Hughes rig count.
A year ago, there were 961 – before the slump in oil prices forced many producers to cut back.
Analysts at Goldman Sachs predicts that output will fall in 2016:
The current rig count is… pointing to U.S. production declining sequentially between 2Q15 and 4Q15 by 320,000 barrels per day.”
Oil price jumps in pre-Christmas rally
After hitting eleven-year lows this week, the oil price is staging a rally this morning.
Crude prices are up in early trading, after new data showed fewer barrels are sitting in storage than expected.
Brent crude is leading the charge – a barrel of North Sea oil has jumped by 1.1%, or 44 cents, to $37.87.
US crude is up almost 1% at $37.83.
Angus Nicholson of IG says:
Judging by the moves in oil overnight, one could be forgiven for thinking that Santa’s sleigh runs on Light-Sweet Cushing, Oklahoma Crude.
But that’s not the real reason, kids.
Instead the rally has been sparked by America’s Energy Information Administration, which reported yesterday that oil inventories fell by 5.9 million barrels last week.
The market had expected a rise of 1.1 million, so investors are revising their concerns about oversupply problems.
But there are still 484.78 million barrels in storage, according to the EIA, which is nearly a record high….
Introduction: It’s starting to look a lot like…..
Good morning, and a Merry Christmas to you.
After a dramatic year, we’ve finally reached the last trading day before the festive break.
Some hardy traders are heading to their desks in the City, where the stock market will shut down at lunchtime.
But there may be more drama on the high streets, with retailers expecting plenty of shoppers ahead of tomorrow’s festivities. They’ll also be catching their breath after Wednesday — which was the busiest shopping day of the year:
Last night, European markets staged a strong rally – with the FTSE 100 surging by 2.6%.
Today will probably be quieter, with shares likely to be little changed in London, Paris and Madrid. It’s going to be particularly quiet in Frankfurt or Milan too; the German and Italian markets are closed.
CMC Markets’ Michael Hewson predicts….
….a fairly lacklustre start to today’s holiday shortened European session, while on the data front it is expected to be a fairly light day.
But we can’t rule out some last minute ructions in the markets.
I’ll be tracking all the main events through the morning (and trying not to fret about finding a last-minute gift for Mrs W….)
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