Equity markets consolidate gains despite rising oil prices

<p>Global equity markets did their best to erase Friday’s losses despite rising oil prices and continuing tension in North Africa. The UK FTSE 100 rallied […]</p>

Global equity markets did their best to erase Friday’s losses despite rising oil prices and continuing tension in North Africa. The UK FTSE 100 rallied to 6043 after trading to a low of 5967 in the morning with strength in financial and commodity stocks being the spur for equity gains.

Heavyweight bank HSBC posted its best day in over a week as it traded above 660p amidst mutterings that it may be moving it operations HQ to Hong Kong.

News that BP was backing off from Algerian assets sales and an upgrade for the oil sector from Deutsche also aided the FTSE as the oil giant traded above 500p for the first time in since mid January.

Luxury goods maker Burberry also featured on the FTSE leader board, buoyed by news that French outfit LVMH had agreed to take control of Italian luxury brand Bulgari. The broad based rally has seen all sectors contribute to the gains, signalling an uptick in investor confidence as we start the week.

US traders did their best to shrug off Friday’s sell off, trading in the blue for the first hour. A background of acquisitions, and commentary from Fed officials that they haven’t ruled out extending QE2, did enough to keep markets positive.

The rising oil price and escalation of fighting in Libya has failed to dent investors’ confidence on both sides of the water as the week starts on a positive note. Yet with the week carrying little in the form of macroeconomic data, focus will remain on the tensions in North Africa and surrounding regions.

Despite the week’s positive start, until the situation in North Africa is resolved, many investors feel the market will struggle to substantially consolidate at these levels; with the risk remaining to the downside and traders mindful that such short term gains can be short-lived in a geopolitical climate still so volatile.

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