Sunday, April 2

Energy majors buoy FTSE 100 as oil climbs again

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UK’s FTSE 100 rose on Monday as surging oil prices boosted shares of energy majors, although concerns about inflation and a handful of brokerage downgrades checked overall market gains.

The commodity-heavy index advanced 0.5%, hitting its highest level in more than two weeks.

Both Shell and BP gained about 2.5%, tracking a jump of more than $3 in Brent crude prices after news that European Union governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine.

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Miners such as Glencore and Anglo American also edged higher as London aluminum prices leaped nearly 5% after Australia banned exports of alumina and aluminum ores to Russia.

Higher commodity prices this year have driven up mining and energy stocks, which have a big weight on the FTSE 100, helping the index outperform its peers. The FTSE 100 has gained 0.7% so far this year, compared with a near 7% decline in the pan-European STOXX 600.

“This resilient performance has helped to put the UK back on the map for overseas investors looking to diversify their holdings,” said Russ Mould, investment director at AJ Bell.

Antofagasta rose 3.9% after the miner said it had agreed to exit the Reko Diq project in southwestern Pakistan as its growth strategy was focused on the production of copper and by-products in the Americas.

Energy consultant Inspired slumped 16.7% after warning of a hit to earnings in case Russian state-owned energy firm Gazprom’s UK arm shuts down.

The midcap index slipped 0.6%, dragged down by a 3.4% drop in infrastructure firm Balfour Beatty after Morgan Stanley downgraded the stock to “underweight.”

Retail stockbroker Hargreaves Lansdown fell 2.8% after Jefferies cut it to “underperform.”

(Reporting by Sruthi Shankar in Bengaluru; Editing by Aditya Soni)