Spreadex Market Update
Goldman Sachs-inspired jump from Brent Crude fails to prevent negative open for FTSE
On the face of it, there was plenty going right for the UK index this morning. In light of a note from Goldman Sachs that claimed the oil oversupply issues are over, with the market being ‘in deficit much earlier than...expected’, Brent Crude to surge by 1.7%. That left the black stuff above $48.50 per barrel for the first time since November, and caused the likes of BP and Shell to jump 0.8% and 0.7% respectively. Analysts pointed to the steps taken to cut production, and unforeseen tragedies like the raging wildfires in Canada, as the main reasons why the oil glut has begun to decrease.
The UK mining stocks were similarly buoyant this morning, ignoring a sharp drop in Chinese industrial production (from 6.8% to 6.0% month-on-month) to bounce back from last Friday’s slump, led by Lonmin (surging nearly 15%) and Anglo American (up just shy of 5.5%).
Yet this commodity stock cheer couldn’t prevent the FTSE from falling around half a percent after the bell, with losses for the banking and pharmaceutical sectors sapping the potential for an oil and mining inspired-rise at the start of the day.
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