View the article online at http://citywire.co.uk/money/article/a882633
Falling pound props up FTSE after oil slide
FTSE 100 receives boost from sterling slump, helping index shoulder fresh fall in oil price.
Update: The FTSE 100 has clung onto gains despite oil giants BP and Shell falling from their heights along with a drop in the price of Brent crude.
The UK blue-chip index closed 38 points, or 0.7%, higher at 5,862, helped by a falling pound. Sterling dropped 1% against the dollar to $1.429 on data showing that despite inflation hitting 0.3% year-on-year in January, a 12-month high, month-on-month prices fell 0.8%, a bigger drop than the 0.7% expected.
A falling pound typically boosts the FTSE 100, whose members rely on overseas markets for around three-quarters of their earnings.
British Airways owner International Airlines Group (ICAG) was among the top risers, up 2.7% at 518p after the price of oil, which had reached at high on $35.50 on hopes major producers would agree to output cuts, fell to $32.32, down 3.2% on the day.
Oil ministers from Saudi Arabia, Russia, Venezuela and Qatar agreed only to freeze production at January levels, disappointing oil bulls.
BP and Shell lead FTSE higher
(9:49) Energy stocks have led the FTSE 100 higher after the price of oil rallied on hopes major producers would take action against a global glut in supply.
That followed a 1.8% jump in Brent crude to $34 a barrel, as a meeting of oil ministers from Saudi Arabia, Russia, Qatar and Venezuela raised hopes a deal to cut production could be struck.
'Of course, discussing something isn't the same as actually doing something, but this could be an indication of something bigger to come,' said Mike van Dulken at Accendo Markets. 'Markets clearly hopeful that it is.'
Anglo American (AAL) was the biggest faller on the index, down 6.1% at 369.2p, having initially risen to 418p as the market opened, after the miner revealed plans to sell its iron ore unit as it reported a 55% fall in profits.
Standard Chartered (STAN) was another heavy faller, down 4.8% at 431.3p as brokers cut their targets on the stock following a rally in the shares, which had jumped 11% over the previous three days.
The rally in the oil price also boosted the shares of mid cap stock Nostrum Oil & Gas (NOGN), which jumped 5.1% to 280.8p while among 'small cap' stocks, Premier Oil (PMO) rose 7.4% to 35.8p and the JPMorgan Russian Securities (JRS ) investment trust was up 6.1% at 284p.
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- BP PLC (BP.L)
- Royal Dutch Shell PLC (RDSb.L)
- Anglo American PLC (AAL.L)
- Standard Chartered PLC (STAN.L)
- Nostrum Oil & Gas PLC (NOGN.L)
- Premier Oil PLC (PMO.L)
- International Consolidated Airlines Group SA (ICAG.L)
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