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FTSE hits record high as oil breaks through $80

FTSE hits record high as oil breaks through $80
 

The FTSE 100 has hit a record closing high, gaining a boost from the strengthening oil rally, as the price of Brent crude broke through the $80 mark.

The UK blue-chip index closed 53 points, or 0.7%, up at 7,788, beating the previous record closing high of 7,779 reached in January. 

'The death of the bull market has been greatly exaggerated, not for the first time in recent history,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.

'A stronger dollar, a rising oil price and the postponement of an interest rate rise can all claim some credit for the recent strong showing from the stock market.'

The FTSE 100 was helped along the way by the oil price, which rose 1.3% to $80.29, its highest level since November 2014, on concerns Iranian exports could fall due to renewed US sanctions.

It marks a fresh milestone for Brent crude, which has rallied by around 20% in dollar terms over the last six weeks, as the Iran sanctions and falling production in Venezuela have sparked supply concerns.

'As Brent hits the psychological level of $80 per barrel traders are questioning whether oil to $100 is a possibility,' said Fiona Cincotta, senior market analyst at City Index.

'Venezuela's problems are unlikely to be resolved any time soon and could be exasperated if Trump aims sanctions at the troubled country, also if the US can get China to loosen energy ties with Iran, then regardless of increased shale production, the price could close in on $100.'

Shares in Shell (RDSb) were up 2.1% at £28.05 while BP (BP) rallied 1.4% to 584p.

Shares in smaller oil explorers and producers were up sharply. On the FTSE 250, Tullow Oil (TLW) rose 5.5% to 268.8p while Cairn Energy (CNE) rallied 4.5% to 262.6p.

Among 'small cap' oil stocks, Premier Oil (PMO) was up 7.4% at 120.7p, EnQuest (ENQ) rallied 3.9% to 42.3p and Ophir Energy (OPHR) added 4.1% to 65.8p. Contractor Gulf Marine Services (GMS) surged 12.8% to 46p.

Royal Mail slumps

Royal Mail (RMG) was meanwhile the heaviest faller on the FTSE 100, down 7.6% at 552.2p as it warned new European data privacy laws could reduce marketing mails.

On the FTSE 250, Ocado (OCDO) soared, up 44.4% at 797.2p as the online supermarket signed a deal with Kroger (KR.N), the largest supermarket chain in the US.

Mothercare (MTC) meanwhile surged to the top of the FTSE Small Cap index, up  24.4% at 26.5p  as the embattled mother and baby products retailer announced its survival plan.

The company will close over a third of its UK stores and said it could secure funding of £113.5 million through refinancing, including a £28 million rights issue. 

Mothercare will also welcome back Mark Newton-Jones as chief executive. 

Newton-Jones was ousted last month by chairman Alan Parker, who then retired just two weeks later.

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