London stocks ended a five day losing streak this morning. Miners and energy companies were in demand on talk of China launching stimulus measures for its slowing economy.
In early trade the FTSE 100 was ahead 77.66 or 1.17% to 6,734. Miners to gain included BHP Billiton and Rio Tinto. Among oils, Tullow Oil and Royal Dutch Shell were notable risers.
The gains in London follow stocks in China rising to their highest levels in three years as hopes grew Beijing will ease monetary policy further after a surprise interest-rate cut last month. There was talk also that People’s Bank of China may reduce banks’ reserve requirements, which helped boost financials in Shanghai.
Oil volatility continues to be a major concern for investors. Overnight there was a sharp rebound in oil futures but this morning Beijing will ease monetary policy further
The Russian rouble is in sharp focus after its biggest one-day slide yesterday, giving up 9% at one stage before reversing on some of decline. Russia is heavily dependent on revenues from oil exports, making its currency vulnerable to falling prices.
Elsewhere on the companies front, Royal Mail was down nearly 3% in morning trade after watchdog Ofcom said the universal postal service, which obliges the Royal Mail to deliver across the country for a single price, is not under threat. The regulator said it saw no reason to overhaul rules to force rivals to take on part of that obligation.
Insurance giant Aviva revealed it has agreed a £5.6bn takeover of rival Friends Life in a deal giving the latter’s shareholders just over a quarter of the combined group. Bloomberg notes that the all-share deal creates a market leader with 16 million life insurance customers. Analysts said the cost savings from the combination were higher than expected but would take several years to be achieved.
Elsewhere, commercial vehicle hire company Northgate pleased the market after it reported a 49% increase in first half underlying profits. It hiked its dividend by over a third and assured trading since the half-year has been “slightly ahead” of expectations.