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Phew! Wall Street helps FTSE lift off lows

FTSE 100 wipes out bulk of the day's losses thanks to US rally, oil price lifting off lows and surge in mining stocks.

 
Phew! Wall Street helps FTSE lift off lows

Update: The FTSE 100 is close to wiping out is losses for the day, after being lent a boost by rallying US markets.

The UK blue-chip index was trading at 5,943 points, down 17 points, or 0.3% on the day, but up by more than 100 points on the 5,830 low it hit in the morning's trading as the plummeting cost of oil and fears over China continued to weigh.

The FTSE 100 was helped by signs of recovery in the oil price, which was trading at $31 a barrel, up 2.2% on the day having fallen below the $30 for the first time in nearly 12 years overnight.

It was given a further boost by US markets, as the S&P 500 rose 1.2% and the Dow Jones added 1.2%.

Miners surged, with shares in Anglo American (AAL) rocketing 15.2% higher to 266.6p, Glencore (GLEN) jumping 9.2% to 78.5p and BHP Billiton (BLT) adding 7.1% to 663.3p.

Oil majors also rallied following the rise in the oil price. BP (BP) jumped 4.4% to 350.6p, Shell (RDSb) rose 3.8% to £13.96 and BG (BG) was up 3.6% at 960.1p.

Joining them at the top of the index was Tesco (TSCO), 6% higher at 167.9p after better-than-expected Christmas sales figures.

Travel stocks weighed on the index following terrorist attacks in Jakarta. InterContinental Hotels (IHG) was down 6.6% at £23.24, cruise ship operator Carnival (CCL) dropped 6% to £36.65 and travel agents Tui AG (TUIT) fell 4.7% to £11.97.

FTSE sell-off reignites as oil falls below $30

(10:09) The sell-off in global markets has reignited, sparked by a fresh tumble in the oil price, which dropped below the $30 mark for the first time in nearly 12 years last night.

The FTSE 100 fell 91 points, or 1.5%, to 5,868, mirroring a tumble in global markets. The drop came after Brent crude fell to a low of $29.73 a barrel overnight, before mounting a small recovery to reach $30.43.

Oil's fresh fall was sparked by news that US gasoline stockpiles had hit a record high, and led to heavy losses on US markets. The S&P 500 fell 2.5% overnight while the Dow Jones lost 2.2%.

Eurozone markets also slumped. The German DAX 30 dropped 2.4%, the French CAC 40 was down 2.1%, Spain's Ibex fell 2.5% and Italy's FTSE MIB shed 2.1%.

The heavy falls follow two days of gains for the FTSE 100. 'Equity markets already heading back towards overnight lows,' said Mike van Dulken, head of research at Accendo Markets.

'Investors have once again realised that nothing has changed and a bounce wasn't really warranted. A depressed oil price remains hindered by global oversupply and the prospect of it getting worse as Iran returns to market, while China jitters continue to shake everything from commodities to financials,' he added.

Merlin Entertainments (MERL) dropped to the bottom of the FTSE 100, suffering its worst-ever one-day fall of 5.5% to 406p, after analysts at JPMorgan cut their rating to 'underweight', arguing the shares had become too expensive. The rating cut is the second this week on valuation grounds, after Shore Capital downgraded the Alton Towers owner to 'hold' on Tuesday.

Tesco (TSCO) was among the few FTSE 100 stocks to make gains, up 5% at 166.2p after reporting better-than-expected results over the Christmas period. Sales rose 1.3% in the six weeks to 9 January, bucking analyst expectations of a fall of up to 3%.

On the FTSE 250, Restaurant Group (RTN) was a heavy faller, down 12.3% at 559.5p after reporting slowing sales growth over Christmas.

The company, which operates the Chiquito and Frankie & Benny's chains, saw sales rise just 1.5% last year.

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