FTSE rallies 1% as price of crude oil consolidates; traders buy in mining weakness
City Index March 3, 2011 9:50 PM
<p>The FTSE 100 charged higher by over 1% in trading on Thursday as the price of crude oil consolidated, giving some muted confidence to the […]</p>
The FTSE 100 charged higher by over 1% in trading on Thursday as the price of crude oil consolidated, giving some muted confidence to the market.
Traders have been reacting with a degree of bullishness to any retreat in the price of crude oil and having seen the price of both Brent and Nymex crude come off today, this has kicked bargain hunters into action, with traders looking to pick up some of the badly beaten stocks.
The mining sector is just one area that has been aggressively sold out over the last few days, falling some 4.5% from Tuesday’s highs to yesterday’s lows. As such, traders have been buying into some of the miners that have been hit particularly hard during the week to what they now perceive as potential short-term bargain opportunities. The mining sector as such is the strongest gaining sector on the FTSE 100.
AMEC gains as earnings beat expectations
The oil sector has also seen high buyer demand, with shares of AMEC gaining over 6% straight to the FTSE 100 leader board after it posted a 30% increase in earnings to £271.8 million, beating market expectations. The British firm also told shareholders that whilst it is looking for major acquisitions across the globe, should it not see any opportunities, it will consider returning cash to shareholders next year. And if that wasn’t enough already to please shareholders, the firm has also announced a 50% increase in dividends. As a result of these numbers and positive sentiment, we have seen high share buyer demand, lifting AMEC shares to a high of 1223p.
BSkyB gains 2% as News Corp deal takes a huge step forward
BSkyB’s shares leapt to new highs again today, rising 2% after Culture Secretary Mr Hunt accepted News Corp’s proposals to spin off Sky News as a separate entity.
Shares in BSkyB have rallied some 6.5% in the last week alone so there was already some optimism that the ruling by the Culture Secretary would be a positive one for the deal. As such, the announcement this morning is not of much surprise to the market and it brings the likely eventual takeover one step closer.
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