London markets recover after strong Wall Street opening
The FTSE 100 recovered after a strong opening by the US markets helped it to bounce back from negative territory.
The European markets were mixed but ticked upwards towards the end of the session as robust sentiment on Wall Street helped investors.
London’s top flight closed 53.41 points higher at 5,563.74 at the end of trading on Monday.
The index had opened weaker as the markets were shaken by tumbling oil prices over the weekend, but was reassured on Monday by the UK oil majors, which saw their share prices stabilise.
Connor Campbell, financial analyst at Spreadex, said: “A positive start from the US, though not the kind of start that necessarily has the robustness to carry through to closing time, helped ease the European indices into the green.
“That the index has posted any growth at all is notable, however, given that Brent Crude has seen its own losses intensify as the day went on.
“Crucially for the FTSE, BP and Shell lifted themselves off their lows, even if their respective rises fell short of the near 3% growth seen at lunchtime.”
Shell and BP both saw their share prices rise as traders considered the oil price slump to be only a short-term weakness. Shares in Royal Dutch Shell rose 31.4p to 1,262p, while shares in BP rose 18.1p to 323.6p.
It came after the price of crude oil plunged as the Saudi Arabia-Russia price war continued to drive supply, despite travel restrictions hitting demand.
The price of a barrel of Brent crude oil decreased 13.7% to 22.23 US dollars.
Europe’s two other largest markets both closed in the green, despite opening lower. The German Dax increased by 1.9%, while the French Cac moved 0.62% higher.
Across the Atlantic, the Dow Jones rallied as it continued its impressive rebound from last week.
In company news, UK house building and property firms were largely in the red after many banks pulled a large portion of their mortgage products.
Meanwhile, aerospace firms also had a particularly poor showing, with plane part manufacturers Rolls-Royce and Meggitt both among the day’s worst performers as more planes were grounded due to travel restrictions.
EasyJet shares fell after the budget airline grounded its entire fleet of aircraft due to the coronavirus pandemic.
The Luton-based carrier said parking all 344 of its planes “removes significant cost” as the aviation industry struggles to cope with a collapse in demand.
The carrier saw its shares close 42.8p lower at 552p.
Elsewhere, cruise giant Carnival also slid after it extended the suspension of some of its sailings by a month.
The Cunard and P&O cruise lines were previously due to resume operations on April 11, but they have been cancelled up to and including May 15. Shares in Carnival fell 72.4p to 909.2p.
Shopping centre owner Hammerson tumbled after it said it had only been paid 37% of the rent that was billed in the UK for the second quarter of the financial year. Shares fell 18.86p to 66.64p.
The biggest risers on the FTSE 100 were Pearson, up 42p at 560.8p, Rentokil, up 24.1p at 386p, Polymetal, up 77p at 1,376.5p, and BP, up 18.1p at 323.6p.
The biggest fallers of the day were Melrose, down 18.7p at 87.5p, Meggitt, down 41p at 269p, M&G, down 17.1p at 117.5p, and Rolls-Royce, down 43.4p at 321.3p.