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Britain’s FTSE rises for third day as energy stocks climb

Britain’s FTSE rises for third day as energy stocks climb

LONDON: Britain’s benchmark share index chalked up its third straight day of gains on Tuesday, as a rise in oil and energy shares offset weaker mining stocks.

The blue-chip FTSE 100 index closed up 0.2 percent at 6,284.53 points.

Shares in oil majors including Royal Dutch Shell and BP climbed as oil prices hit eight-month highs, buoyed by the U.S dollar nearing one-month lows and by falling Nigerian oil output after a spate of attacks on infrastructure.

“The $50-per-barrel line in the sand remains key as a big figure resistance level for oil prices, though it could be argued momentum is to the upside for now on oil,” Cornhill Capital broker, James Keen, said.

Shell got a further lift as investors welcomed its latest strategy update, in which Shell said it planned to increase cost savings from its takeover of BG Group.

However, mining stocks, such as Anglo American and Glencore, lost ground as copper prices fell, even though a weaker dollar was expected to offset negative sentiment created by signs of economic weakness in top consumer China.

World stock markets got a general boost from US Federal Reserve Chair Janet Yellen’s speech late on Monday.

She gave a largely upbeat assessment of the US economic outlook and while she said that interest rate hikes were coming, she gave little sense of when this might occur, which pushed down the dollar on currency markets.

The FTSE is up about 1 percent this year, but remains some 12 percent below a record high hit in April 2015, with concerns over a slowdown in China, with the world’s No. 2 economy, having knocked back stock markets globally in that time.

Some traders remained wary of buying into the FTSE ahead of Britain’s June 23 vote on its membership of the European Union, given lingering uncertainty over the result.

“I wouldn’t be inclined to buy into the FTSE, this side of the referendum,” Horizon Stockbroking director, Kyri Kangellaris, said.

Copyright Reuters, 2016

Courtesy : BRecorder



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