Oil stocks lift UK's FTSE 100 after dull start

UK's blue-chip index extended gains for the second straight session on Wednesday, as a rally in oil stocks helped counter early gloom amid concerns about tighter U.S. monetary policy. The FTSE 100 reversed course to rise 0.2%, after falling as much as 0.2%, while the domestically focussed mid-cap index added 0.1%.

UK's blue-chip index extended gains for the second straight session on Wednesday, as a rally in oil stocks helped counter early gloom amid concerns about tighter U.S. monetary policy.

The FTSE 100 reversed course to rise 0.2%, after falling as much as 0.2%, while the domestically focussed mid-cap index added 0.1%. Oil majors BP and Royal Dutch Shell gained about 1.5%, extending gains from the previous session, with the decision by major producers to add supply next month being seen as a sign of confidence.

"Demand for oil has held up and is proving able to largely withstand the latest coronavirus wave ... suggesting a global economy that is becoming more adept at dealing with the problems caused by the virus," said Stuart Cole, macroeconomist at Equiti Capital. Prime Minister Boris Johnson said on Tuesday that England could withstand a surge in COVID-19 infections without shutting down the economy as Britain reported another record daily high in cases, fuelled by the Omicron variant.

Asian stocks skidded and other European shares took a breather on Wednesday as higher U.S. Treasury yields weighed on global technology firms, while Chinese regulatory moves on tech firms added to the downbeat mood. "Evidence of a more robust response being contemplated by the FOMC (Federal Open Market Committee) could see equity markets struggle a bit today," Cole added.

Some positive brokerage action offset losses on the FTSE 100. London Stock Exchange Group gained 2.2% after Citigroup upgraded its shares to "buy", while online grocer Ocado and plumbing products distributor Ferguson added 4.9% and 0.5%, respectively, following rating upgrades by Berenberg.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)