FTSE CLOSE: Footsie nudges year high as oil tops $61 again and German growth easily beats hopes
A surprise revival in the oil price and far better than expected eurozone growth figures cheered investors today. Germany's DAX and France's CAC 40 were also ahead, while in the US the Dow Jones was 46.8 points higher at 18,019.2.
A jump in Brent crude above $61 a barrel boosted energy stocks on both sides of the Atlantic - Tullow Oil, BP and Shell were among the risers over here.
The German economy expanded by a much better than forecast 0.7 per cent in the final three months of last year, leading to growth of 1.6 per cent in 2014 as a whole.
'The FTSE 100 has finished the week’s final session in a buoyant mood, but the 6,900 level continues to prove somewhat elusive,' said Tony Cross of Trustnet Direct.
A sharp rise in oil prices has been the saving grace to today’s fortunes with Brent crude topping $60 a barrel and finding new highs for the year, so this has helped drag a number of the big commodity players higher.
'The Baker Hughes US Rig count data that’s due later tonight could provide some renewed direction for oil prices – and in turn the energy sector – in the latter part of the US session if this carries a clear signal regarding supply.
Otherwise looking into next week it’s going to be all back to the Greek debt dispute and whether that Ukrainian ceasefire can hold. The London index is nudging towards those all time highs, but with numerous geopolitical risks still in play, the confidence could still sour quickly.'
Jasper Lawler of CMC Markets said: 'Fretting over Greece was put to one side on Friday after better than expected GDP growth in Germany offered some relief over the health of Europe’s largest economy and sent the benchmark German DAX to new all-time highs.
'German GDP expanded by 0.7 per cent year-over-year in the fourth quarter, much higher than the 0.3 per cent forecasted thanks to a boost in domestic demand.
'Markets were encouraged early on by comments from [German leader] Angela Merkel following a meeting with the new Greek prime ministerAlexis Tsipras. The German Chancellor said that a "compromise" was possible and that she had a "friendly" encounter with Tsipras.
'While Merkel’s word were soothing, it remains to be seen if that translates to any real compromise taking place in Monday’s Eurogroup meeting of finance ministers.'
The oil price recovery drove Tullow Oil up 5 per cent or 19.9p to 405p in today's session, while BP was 9.9p higher at 454.2p, and Royal Dutch Shell advanced 33p to 2236.5p.
GlaxoSmithKline was another strong riser after UBS ditched its sell rating on the pharmaceuticals stock and recommended that clients now buy the shares. The stock jumped by nearly 5 per cent or 67.5p to 1553p.
Rolls-Royce shares were in the spotlight after it announced a further downgrade to profits guidance for this year. Rolls also reported a 6 per cent drop in underlying revenues to £14.6billion for 2014 and said underlying profits were 8 per cent lower at £1.62billion.
Its shares fell by as much as 2 per cent but later recovered to end the session 39.5p higher at 944.5p.
Stocks on the back foot included BT after US-owned rival Virgin Media vowed to spend £3billion on expanding its fibre-optic broadband network over the next five years.BT shares have been at a 14-year high in recent days but fell back 2 per cent or 10.9p to 439.1p. Sky was 8.5p lower at 919p.
Elsewhere in the telecoms sector, TalkTalk shares dipped 3.7p to 320p in the FTSE 250 after its shares were cut to underperform by broker Jefferies.
The euro was slightly stronger against the US dollar but failed to make headway against the pound after the Bank of England had on Thursday appeared to bring forward the likely timing of an interest rate hike.
Sterling was flat against the single currency at just below €1.35 and slightly higher against the US dollar at just under $1.54.
The biggest risers on the FTSE 100 Index were Tullow Oil up 19.9p to 405p, BHP Billiton up 74.5p to 1569p, GlaxoSmithKline up 67.5p to 1553p and Rolls-Royce up 39.5p to 944.5p.
The biggest fallers on the FTSE 100 Index were Ashtead down 27p to 1073p, BT down 10.9p to 439.1p, Carnival down 63p to 2900p and ARM Holdings down 23p to 1062p.
17.00:
The FTSE 100 closed up 45.41 points at 6873.52. More to come.
15:30: The Footsie continued its positive streak in late afternoon trading as US stocks opened higher buoyed by a jump in the Brent crude oil price.
With around an hour of trading to go in London, the FTSE 100 index was up 45.4 points at 6,874.5, not far off its session peak of 6,887.57.
In early deals on Wall Street, the blue chip Dow Jones Industrial Average was up 38.50 points to 18,013.2, while the broader S&P 500 index rose three points, to 2,092.4, and the tech-laden Nasdaq Composite added 14 points to 4,871.6.
US equity markets were being driven by key trading updates and earnings, including Interpublic Group, CBS, Groupon and food company J.M. Smucker.
Energy stocks were also riding high on the back of the oil price gain, with Chevron, Exxon and ConocoPhillips all making early gains.
Connor Campbell, at Spreadex, said: 'The Dow Jones crossed 18000 for the first time in 2015, whilst the S&P reached its all-time highs in a very good open for the US markets.'
Meanwhile there has already been some important US data out today, with imported goods falling sharply again in January mainly because of much cheaper oil - a trend that's keeping inflation under wraps. The drop was less than expected, while export prices also decreased.
Next up this afternoon is the University of Michigan's February reading on consumer sentiment - with expectations for a 98.1 reading.
Investors will also be looking for the weekly Baker Hughes rig-count data for any clues to whether oil production in the US is slowing down.
Commerzbank said in a note: 'In view of the low prices up until recently, a further noticeable decrease in the oil rig count can be expected, which could further fuel the price rally.'
The data that came out last Friday showed the number of rigs drilling for oil in the US fell for a ninth straight week to the lowest level in roughly five years.
Finally, retiring Dallas Fed President Richard Fisher will give a speech reflecting on his Federal Reserve career - which could provide some frank assessments on the state of the US economy.
13:30: The Footsie was still making gains at the lunchtime trade as investors cheered a turnaround in Europe's economic fortunes after the Continent released a impressive set of GDP data this morning.
By mid session, the FTSE 100 index was up 40.2 points, or 0.5 per cent at 6,867.4, just 100 points short of its record level.
In Paris the CAC 40 index was 0.7 per cent higher, while Frankfurt's Dax 30 index was also riding high up 0.6 per cent - with the DAX reaching 11,000 for the first time.
The trigger for the gains on European bourses came from Germany after it emerged that the country grew by a much better than expected 0.7 per cent in the final three months of last year, leading to growth of 1.6 per cent across 2014.
Nick Kounis, at ABN Amroa, said about eurozone GDP growth: 'The number of domestic drags on the economy have eased considerably: house prices have picked up and the labour market is slowly recovering. Sentiment indicators and economic data have turned for the better in recent months.'