FTSE up as crude falls ease inflation fears
The blue-chip index rose early on Friday as lower oil prices helped reduce concerns over spiralling inflation, while dragging commodity stocks lower.
FTSE up as energy stocks gainAt 8.35 a.m., the FTSE 100 .FTSE was up 19.4 points, or 0.4 percent at 5,516.8 to extend a 0.9 percent rise in the previous session.
As U.S. crude CLc1 prices slipped to about $113 a barrel, heavyweight oil companies sagged. BP, Royal Dutch Shell and Tullow Oil shed between 0.2 and 0.7 percent.
BP and its partners in oil firm TNK-BP will meet next month in a bid to resolve a row over management and a share float, a source close to the board said, as the Russian co-owners moved closer to oust TNK-BP's head.
Adding to the negative oil sector sentiment, the International Energy Agency said oil demand in Western countries is set for its biggest fall in 25 years as the global economic slowdown intensifies and consumers respond to high prices, the Times newspaper reported.
But the falling energy prices helped buoy British Airways and Carnival, traders said, with the airliner and cruise ship operator 2.3 and 2.8 percent higher, respectively.
Retailers also rose as the inflationary threat weakened, with Next, Kingfisher and Carphone Warehouse up 1.9-2.5 percent.
"With some European markets closed and little if any interesting corporate news, it looks as if we are going nowhere very slowly today," said Howard Wheeldon, senior strategist at BGC Partners.
"As far as oil goes ... we've moved into a very new world and I don't think it's right to take a view that the oil price can be sustainable at below $100."
"We may be lower for a bit but you should still expect oil hovering closer - and hopefully remaining - to $120 and perhaps we can begin to live with that," he added.
|
|
