FTSE CLOSE: Footsie finishes up 1% as global markets rally on oil price surge to nearly $42

17.25: The FTSE 100 closed up 67.52 points at 6204.41 as a jump in the oil price sparked a rally on stock markets around the world.

The Dow Jones was ahead 61.9 points at 17,603.9 in early trading, while Germany's DAX was up 91.6 points at 9,622.3 and France's CAC 40 rise 57.2 points to 4,303.1. The price of Brent crude increased to $41.67 a barrel and US WTI crude was at $39.50.

'A jump in the price of oil and the end of a five-day surge in the Japanese yen has prompted relief across global stock markets,' said Jasper Lawler of CMC Markets. 'Friday’s gains leave the FTSE 100 up on the week but still essentially flat for the last five weeks, trapped in a tight 150 point range.

Market watch: A jump in the oil price sparked a rally in stocks around the world

Market watch: A jump in the oil price sparked a rally in stocks around the world

'The recovery in risk appetite on Friday that has seen funds flow out of bonds and back into equities can almost exclusively be laid at the feet of a rebound in the oil price. This puts the recovery on risky ground given the absence of confidence that producers can reach agreement at next week’s meeting in Doha.

'The drop in the yen is at the margins a source of relief for those equity investors aware of the strong historical correlation between USD/JPY [US dollar versus yen] and the S&P 500.

'The correlation is broken at the moment since the S&P has remained near its highs whilst the yen has appreciated. For the two markets to come back into line; the yen needs to snap back or stocks need to fall further.

Tony Cross of Trustnet Direct said: 'It's difficult to ignore the fact that there’s definitely some bullish momentum standing behind equities now.

'Yet again it’s the price of oil that’s driving the bulk of rally – WTI crude is up almost 7 per cent on the day and sitting just a whisker away from $40/barrel, whilst the Dow Jones non-ferrous metals index is up by a similar amount in early trade, too.

'As a result it’s the commodity stocks that are scattered across the top of the board once more with gains typically in the region of 3%, although Anglo American is a notable stand-out here, charging ahead, up 8 per cent.'

Oil giants Royal Dutch Shell and BP felt the force of the oil price rise, stepping up 64.5p to 1740.5p and 11.1p to 350.4p respectively.

Heavyweight miners were also higher, with Anglo American leading the charge, rising 8.1 per cent or 41.1p to 547.2p, while BHP Billiton rose 33p to 760.5p.

Womenswear retailer Bonmarche said it was 'cautious' about high street trading this year after colder weather hit the sales of new spring ranges. Shares slumped by almost 10 per cent, or 18p, to 170p.

Marks and Spencer continued its gains from the previous session when shares lifted on better-than-expected sales results. Shares were up 11.2p to 444.2p.

Information services firm Experian came under pressure after it was hit with a broker downgrade by HSBC, with shares dropping 16p to 1239p.

The pound was up 0.4 per cent against the dollar at $1.40 and rose slightly against the euro to €1.24.

The biggest risers in the FTSE 100 were Anglo American up 41.1p to 547.2p, BHP Billiton up 33p to 760.5p, Royal Dutch Shell up 64.5p to 1740.5p, and Rio Tinto up 70p to 1987.5p.

The biggest fallers in the FTSE 100 were Experian down 16p to 1239p, Shire down 43p to 4250p, Schroders down 24p to 2500p, and Berkeley Group down 22p to 3124p.

17.01: The FTSE 100 closed up 67.52 points at 6204.41. More to come. 

15.00: The Footsie was up over 1 per cent in late afternoon trading as US stocks joined in an end of week rally by global markets thanks to a jump in oil prices back above $41 a barrel today.

With an hour and a half to go until the close in London, the FTSE 100 was ahead 62.6 points, or 1.0 per cent at 6,199.8, just below the session peak of 6,203.30 and around 50 points, or 0.9 per cent above last Friday’s close of 6,146.10 after another see-saw week.

European markets were also strong, with the CAC 40 index in Paris up 1.2 per cent and Frankfurt’s Dax 30 index ahead 1.4 per cent helped by some upbeat German trade figures.

Strong end: The Footsie was up over 1 per cent in late afternoon trading as US stocks joined in an end of week rally by global markets thanks to a jump in oil prices back above $41 a barrel today

Strong end: The Footsie was up over 1 per cent in late afternoon trading as US stocks joined in an end of week rally by global markets thanks to a jump in oil prices back above $41 a barrel today

In early trade on Wall Street, after big falls yesterday, the blue chip Dow Jones Industrial Average bounced 144.0 points higher to 17,685.9, while the broader S&P 500 index added 17.5 points at 2,059.5, and the tech-laden Nasdaq Composite gained 40.0 points at 4,888.4.

Global stocks advanced as oil prices rebounded from recent falls, with Brent crude up over 4 per cent at $41.11 a barrel after economic indicators from the US and Germany implied support for fuel demand, and amid hopes for a production freeze at this month’s Opec meeting in Qatar.

Joshua Mahony, Market Analyst at IG, said: ‘Crude prices have clearly shifted into a more bullish gear to end out this week, with WTI breaking to a new April high.

‘There will be a clear market repositioning ahead of the OPEC meeting in nine days’ time, yet with continued mixed messages emanating from various sources, directional bias continues to change hands every other day.’

On currency markets, the pound pushed higher again against both the dollar and the euro, having wobbled this morning after UK data today showed industrial output record its biggest annual fall in two and a half years in February, while Britain's trade gap was also much wider than expected that month.

Sterling was up 0.4 per cent at $1.4111 versus a weaker dollar, with the UK currency having fallen sharply in recent sessions on European Union ‘Brexit’ worries.

The pound was also 0.3 per cent higher versus the euro at €1.2382, with the single currency weighed by yesterday’s admission from the European Central Bank that it discussed making deeper interest rate cuts last month.

12.15: The Footsie extended its gains at lunchtime as heavyweight commodity stocks rallied thanks to a recovery in oil and metal prices as the dollar - in which they are priced - retreated, while the pound eased off earlier highs after data showing a drop in industrial output and weak trade figures.

By mid session, the FTSE 100 was up 44.6 points, or 0.7 per cent at 6,181.5, just below the day’s  peak of 6,188.60 and around 35 points, or 0.6 per cent above last Friday’s close of 6,146.10.

European markets were even firmer, with France’s CAC 40 index and Germany’s Dax 30 index both ahead 0.9 per cent helped by news Germany's exports rebounded in February, while imports grew at a slower pace.

Firm progress: The Footsie extended its gains at lunchtime as heavyweight commodity stocks rallied thanks to a recovery in oil and metal prices as the dollar - in which they are priced - retreated

Firm progress: The Footsie extended its gains at lunchtime as heavyweight commodity stocks rallied thanks to a recovery in oil and metal prices as the dollar - in which they are priced - retreated

US stock index futures also pointed to an opening bounce on Wall Street, after a triple-digit drop by the Dow yesterday, although with little economic news for direction – aside from US wholesale inventories at 3pm – the twin pillars of volatile oil prices and US rate hike uncertainties will be the only focus.

After falls yesterday, oil prices rebounded today, with Brent crude up 3 per cent to $40.67 a barrel after economic indicators from the US and Germany implied support for fuel demand, and amid hopes for a production freeze at this month’s Opec meeting in Qatar.

On currency markets, the pound held firm against a weaker dollar, up 0.1 per cent at $1.4065 having fallen sharply in recent sessions on European ‘Brexit’ worries.

Sterling also gained versus the euro, ahead 0.1 per cent at €1.2367, with the single currency having been knocked by the European Central Bank’s admission yesterday that it discussed making deeper interest rate cuts last month.

But the pound was well off earlier highs after UK data today showed industrial output record its biggest annual fall in two and a half years in February, while Britain's trade gap was also much wider than expected that month as the country sucked in a record amount of imports from the European Union.

Martin Beck, senior economic advisor to the EY ITEM Club, said: ‘The scale of the decline in February’s industrial production and manufacturing output was an unwelcome shock. The weakness of manufacturing was particularly eye-catching, with January’s rise revised down and output then collapsing in February.’

He added: ‘The ongoing weakness of exports is central to manufacturers’ struggles. The February data may have been a little better than January, but non-oil goods exports were still down 3 per cent on a three-months-on-3-months basis.

'While the weakening of the pound over the past six months should increasingly provide assistance, soft global growth is likely to limit the extent to which the export picture improves.’

Among equities, heavyweight energy shares took over the lead on the FTSE 100 index, with BP ahead 2.4 per cent, or 8.3p at 347.6p and Shell up 38.0p at 1,704.5p as Brent crude stayed back above $40 dollars a barrel.

Miners also remained firmer as copper prices rose as well, although the stocks drifted off earlier highs. Anglo American added 3.9p at 510.0p, while Rio Tinto rose 30.5p to 1,948.0p, and BHP Billiton gained 10.1p at 737.6p

Elsewhere among the blue chips, Marks and Spencer remained among the biggest risers, up 10p to 443p following gains in the previous session when shares rose after a better-than-expected trading update.

The retail giant's clothing and home like-for-like sales tumbled 2.7 per cent in the 13 weeks to March 26, but they beat City expectations of a 3.4 per cent fall and improved on the third quarter when sales slumped 5.8 per cent.

And Vodafone added 1.4 per cent, or 3.2p at 225.9p after Deutsche Bank added the mobile telecoms giant’s stock to its ‘Short Term Buy’ list.

But on the downside, Experian was the biggest FTSE 100 fallers, shedding 1.7 per cent or 21p at 1,234p, after the credit checking firm received a double rating downgrade from HSBC, with the broker cutting its stance to reduce from buy due to concerns over structural risks in Brazil. 

10.00: The Footsie remained higher as the morning session progressed, rallying from yesterday’s falls as heavyweight commodity stocks bounced in line with a recovery by oil prices, while the pound held firm despite a drop in UK industrial output.

By mid morning, the FTSE 100 was ahead 35.0 points, or 0.6 per cent at 6,171.8, having closed 24.74 points lower yesterday after commodity stocks retreated then in the face of another slide in the oil price.

But oil prices rebounded higher today, with Brent crude up over 2 per cent to $40.29 a barrel after economic indicators from the US and Germany implied support for fuel demand.

Bounce back: Oil prices rebounded higher today, with Brent crude up over 2 per cent to $40.29 a barrel after economic indicators from the US and Germany implied support for fuel demand

Bounce back: Oil prices rebounded higher today, with Brent crude up over 2 per cent to $40.29 a barrel after economic indicators from the US and Germany implied support for fuel demand

Although analysts warned that another downturn in crude could still be on the way due to ongoing oversupply issues as an Opec deal on a production freeze remained in the balance.

In European markets, France’s CAC 40 index and Germany’s Dax 30 index were both up 0.7 per cent helped by news Germany's exports rebounded in February, while imports grew at a slower pace, and yesterday’s further rate hike hints from the European Central Bank.

On currency markets, sterling was higher against a weaker euro, up 0.4 per cent at €1.2394, with the single currency having been knocked by the ECB’s admission that it discussed making deeper interest rate cuts last month but held off to keep some future monetary policy ammunition.

Against the dollar, the pound was also up 0.4 per cent higher at $1.4110 having fallen sharply in recent sessions.

Sterling trimmed earlier bigger gains however, after UK data which showed industrial output record its biggest annual fall in two and a half years in February, confirming industry surveys showing a marked slowdown at the start of 2016 as the global economic outlook worsened.

UK industrial output fell 0.3 per cent month-on-month in February to give a 0.5 per cent fall on the year, its biggest drop since August 2013, the Office for National Statistics said. Economists had expected it to edge up by 0.1 per cent on the month and hold steady on the year.

Output in manufacturing fell by 1.1 per cent on the month and dropped 1.8 per cent on the year, again a sharper fall than economists had expected and the biggest decline since July 2013.

Dennis de Jong, managing director at UFX.com, said: ‘Chancellor George Osborne will have been expecting a slight drop in today’s manufacturing production figures, especially amid the furore of steel giant Tata signaling their intention to close their Port Talbot plant, but the severity of the fall will have been surprising.’

He added: ‘Global steel prices isn’t the only issue hurting manufacturing production. The rapidly approaching Brexit referendum is on a knife edge and, with the outcome uncertain, it may cause orders to dry up until the votes are counted.’

Britain's trade gap was also much wider than expected that month as the country sucked in a record amount of imports from the European Union.

The ONS said Britains’s deficit on trade in goods and services was estimated at £4.8billion in February, albeit a £0.4billion narrowing from January’s revised deficit of £5.2billion

Among equities, mining stocks led the FTSE 100 higher lifted by firmer oil and copper prices, with Anglo American the top blue chip gainer, up 3 per cent or 15.6p to 521.7p, while Rio Tinto rose 56.5p to 1,974.0p, and BHP Billiton added 20.7p at 748.2p.

Energy shares were also in demand, with BP ahead 9.3p at 348.6p and Royal Dutch Shell up 36.5p at 1,712.5p as Brent crude broke back above $40 dollars a barrel.

Banks were also higher, led by a 2.4 percent rally by Standard Chartered, up 10.3p to 444.1p, with lenders sensitive to swings in commodity prices due to their debt exposure to the sector.

Also among the blue chip risers, Vodafone gained 1 per cent, or 2.7p at 225.4p after Deutsche Bank added the mobile telecommunications giant’s stock to its ‘Short Term Buy’ list.

But on the downside, Experian was the biggest FTSE 100 faller, shedding 1.7 per cent or 21p at 1,234p, after the credit checking firm received a double rating downgrade from HSBC, with the broker cutting its stance to reduce from buy due to concerns over structural risks in Brazil.

In a note, HSBC’s analysts said: ‘Brazil's largest commercial banks ... are working to set up a Positive credit bureau that will compete with Experian.

‘We believe such a market development poses a multiple de-rating threat.’

And fund manager Schroders fell 11p to 2,513p after being cut to neutral from outperform by Exane BNP.

On the second line, explorer Tullow Oil was the biggest FTSE 250 casualty, dropping 3 per cent or 2.6p to 187.8p after it said it plans to revise its full year production guidance after confirming operations being restrained due to damage to the turret bearing on its floating production, storage and offloading vessel at the Jubilee field, offshore Ghana.

Among the day’s other meagre corporate news, shares in small cap womenswear retailer Bonmarche dropped 9.5 per cent, or 18p to 170p, after it said it is ‘cautious’ about trading on the high street this year after colder weather hit the sales of new spring ranges.

The Wakefield-based firm said like-for-like sales edged up 0.4 per cent in the 13 weeks to March 26, compared with a jump of 4.7 per cent in the same period a year ago. Total sales rose 5.2 per cent in the period.

The comment came after the group rattled the market in December after cutting its full year pretax profit forecasts by as much as 20 per cent to between £10.5million and £12million. The group said today full year profit will be at the lower end of that guidance

And DFS Furniture fell 5 per cent, or 15.0p to 305.0p after private equity firm Advent International agreed to sell a 14.1 per cent stake in the recently re-listed sofa retailer for £90million.

Advent sold 30 million DFS shares at 300p each to institutional investors, leaving the private equity firm with a 24.1 per cent stake in the firm. 

08.10: The Footsie bounced higher in early trading, rallying from falls in the previous session in line with a recovery by oil prices and as Tokyo shares rebounded after Japan’s finance minister pledged to guard against strong moves in the yen following a recent leap in value against the dollar.

In opening deals, the FTSE 100 index was 37.2 points, or 0.6 per cent higher at 6,174.0, having closed 24.74 points lower yesterday after commodity stocks retreated in the face of another slide in the oil price.

But oil prices rebounded higher today, with Brent crude up 1 per cent to just below $40 a barrel after economic indicators from the US and Germany implied support for fuel demand.

Although analysts warned that another downturn in oil prices could still be on the way due to ongoing oversupply issues as an Opec deal on a production freeze remained in the balance.

Yen focus: The Footsie bounced higher in early trading as oil prices rallied and after Tokyo shares rebounded following Japan’s finance minister, Taro Aso (pictured)  pledge to guard against strong moves in the yen

Yen focus: The Footsie bounced higher in early trading as oil prices rallied and after Tokyo shares rebounded following Japan’s finance minister, Taro Aso (pictured)  pledge to guard against strong moves in the yen

In early trade in Europe, France’s CAC 40 index and Germany’s Dax 30 index were both up around 0.5 per cent helped by news that Germany's exports rebounded in February, while imports grew at a slower pace.

Data published early this morning showed German exports grew 1.3 per cent month-on-month in February following a 0.6 per cent drop in January and a 1.3 per cent fall in December, with economists having forecast a 0.5 per cent rise. 

Meanwhile, growth in imports eased to 0.4 per cent from 1.3 per cent a month ago, against forecasts for a fall of 0.3 per cent.

Overnight US stocks dropped sharply as oil prices slid yesterday as worries about the global economy resurfaced, dragging down the dollar against the yen and causing investors to flee riskier assets.

Meanwhile, Federal Reserve Chair Janet Yellen, in a conversation with former Fed chairmen Ben Bernanke and Alan Greenspan said yesterday that the US economy is on a solid course and still on track to warrant further interest rate hikes, reviving uncertainty over Fed action.

Most Asian shares fell to three-week lows today, but Japan bucked the trend after its finance minister Taro Aso said the government would take steps to counter ‘one-sided’ moves in the yen in either direction.

Jasper Lawler, Market Analyst at CMC Markets UK, said: ‘The BOJ and ECB have effectively run out of ammunition to depreciate their currencies to try and stimulate some so-far non-existent inflation.

'If the ECB and BOJ choose to fight back, it seems “helicopter money” might be the only option left.’

Yen strength is regarded as negative for Japan's big exporting firms, and after earlier falling to near-two-month lows on strong yen buying, the Nikkei 225 index bounced 1.2 per cent higher in late trading.

Chinese stocks, however, retreated ahead of a slew of economic data for the country due over the next week, including money supply, new lending and inflation. The Shanghai Composite index shed 0.7 per cent, while Hong Kong's Hang Seng lost 0.4 per cent.

The economic focus in London will be on the latest UK manufacturing and industrial production numbers, due at 9.30 am, together with Britain’s latest trade figures.

UK manufacturing production is forecast to fall 0.2 per cent month-on-month in February, whilst industrial production growth is expected to moderate to 0.1 per cent.

Stocks in focus in London include:

AB FOODS - The blue chip food to retail conglomerate said it is to acquire the 48.65 per cent of Johannesburg-listed sugar producer Illovo Sugar it does not already own for 5.6billion rand, equivalent to about £262.0million in cash.

TULLOW OIL – The mid cap oil explorer said it plans to revise its full-year production guidance after confirming operations are having to be restrained due to the turret bearing on its floating production, storage and offloading vessel at the Jubilee field offshore Ghana being damaged.

JOHN WOOD GROUP – The oil services firm said it has acquired a US-based proprietary software and consulting services business that will boost its automation and control unit and expand its geographical reach.

DFS FURNITURE - Private equity firm Advent International said it has agreed to sell a 14.1 per cent stake in the FTSE 250 sofa retailer for £90.0million to institutional investors, leaving it with a 24.1 per cent holding in the firm.

UK company news scheduled today includes:

Finals: Specialist Investment Properties

AGM: New World Resources, Apax Global Alpha

Economic news scheduled today includes:

UK trade balance at 9.30am

UK manufacturing, industrial output at 9.30am

NIESR UK GDP estimate at 3pm

German trade balance at 7am

US wholesale inventories at 3pm