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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Big oil merger talk fuels share spurt Talk of a mega-merger between oil giants BP and Royal Dutch Shell fuelled a bull market in London on Tuesday.
Shares in BP spurted 19.35p to 433.85p and Shell gushed 87p to 2208p as several traders cited market talk of a possible takeover by Shell, although both refused to comment.
The speculation followed tumbling oil prices as Middle East and US oil chiefs go head-to-head in a battle for dominance of the global energy market.
US light crude was about $69 a barrel at the close of trading in London while a barrel of Brent was hovering around $72.5.
Analysts have highlighted the possibility that the drop in prices could trigger falling investment and mergers in the industry.
"BP shares have rallied on the back of enthusiastic buying on talk of Shell's interest in the company," said IG analyst Chris Beauchamp. "But it seems difficult to believe Shell would make such a big acquisition at this difficult time for the oil market."
The talk added about 20 points to the FTSE 100 Index, which closed 85.7 points higher at 6742.1.
Other oil companies benefiting from the chatter included Tullow Oil, up 24.2p at 424.7p, and BG Group, which gained 30.9p to 935.5p.
In economic news, British construction activity dropped to its slowest rate of expansion in more than a year in November, according to data from Markit/CIPS.
European stocks jumped on hopes that the European Central Bank will boost stimulus measures when policymakers meet in Frankfurt on Thursday.
Back in London, confirmation of an agreed takeover of insurer Friends Life by rival Aviva also lifted the mood. Friends Life advanced 8.9p to 375.1p and Aviva increased 0.6p to 500p.
Royal Mail led the Footsie fallers with a 12.6p drop to 405.5p after regulator Ofcom said it was consulting on changing its charges to rivals for using its service, but ruled out regulating direct competitors.
BT rang up 6.1p to 417.9p as rating agency Moody's said the telecoms group's potential acquisition of rivals EE or O2 would likely speed up convergence in the UK fixed line-mobile phone market |
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| | TechMARK 2,938.93 +0.53%
FTSE 100 6,742.10 +1.29%
FTSE 250 15,832.95 +0.72%
FTSE 100 - Risers
Tullow Oil (TLW) 424.70p +6.04%
BP (BP.) 433.85p +4.67%
Experian (EXPN) 1,049.00p +4.38%
Royal Dutch Shell 'A' (RDSA) 2,208.00p +4.10%
Sainsbury (J) (SBRY) 241.20p +4.06%
Royal Dutch Shell 'B' (RDSB) 2,292.00p +3.80%
Morrison (Wm) Supermarkets (MRW) 182.90p +3.51%
BG Group (BG.) 935.50p +3.42%
Hargreaves Lansdown (HL.) 989.50p +3.07%
Smiths Group (SMIN) 1,144.00p +2.60%
FTSE 100 - Fallers
Royal Mail (RMG) 405.50p -3.01%
ARM Holdings (ARM) 891.00p -2.68%
Persimmon (PSN) 1,525.00p -0.97%
United Utilities Group (UU.) 899.50p -0.94%
InterContinental Hotels Group (IHG) 2,590.00p -0.69%
SABMiller (SAB) 3,433.00p -0.64%
Johnson Matthey (JMAT) 3,326.00p -0.60%
Smith & Nephew (SN.) 1,090.00p -0.55%
AstraZeneca (AZN) 4,684.00p -0.55%
Burberry Group (BRBY) 1,626.00p -0.43%
FTSE 250 - Risers
Northgate (NTG) 532.50p +9.25%
Afren (AFR) 49.45p +8.30%
Premier Oil (PMO) 199.40p +6.80%
Oxford Instruments (OXIG) 1,222.00p +6.26%
Bwin . party Digital Entertainment (BPTY) 109.50p +6.10%
Soco International (SIA) 286.50p +5.29%
Kaz Minerals (KAZ) 247.40p +5.28%
Cairn Energy (CNE) 166.60p +4.26%
Wood Group (John) (WG.) 620.50p +4.02%
Supergroup (SGP) 902.00p +3.98%
FTSE 250 - Fallers
EnQuest (ENQ) 43.24p -4.15%
Savills (SVS) 633.00p -4.02%
Evraz (EVR) 141.00p -2.89%
Taylor Wimpey (TW.) 130.30p -2.76%
Stock Spirits Group (STCK) 245.10p -2.43%
Enterprise Inns (ETI) 105.40p -2.41%
Barratt Developments (BDEV) 451.00p -2.04%
Paragon Group Of Companies (PAG) 408.00p -1.99%
AL Noor Hospitals Group (ANH) 964.00p -1.88%
Big Yellow Group (BYG) 589.50p -1.83%
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mostly higher on ECB stimulus speculation as policy meeting looms Stocks in the Eurozone were mostly higher as speculation on stimulus measures grew ahead of the European Central Bank's policy meeting.
The ECB, which makes its latest announcement on Thursday, has said it would consider buying government bonds if inflation remains dangerously low for too long.
While most analysts expect the central bank will hold back on further easing at the November meeting, policymakers have unanimously agreed to use "unconventional measures within its mandate" to boost the economy if needed.
"Prospects for ECB quantitative easing are looking higher as policymakers' rhetoric continues to build," according to Jaisal Pastakia, investment manager at Heartwood Investment Management.
Meanwhile 10-year Greek bond yields dropped by two basis points 7.82%, falling for a third day running. It fell as low as 7.79% earlier which comes amid signs that the troubled nation is set to accept a precautionary credit line from the International Monetary Fund as it exits its bailout programme next year.
Moving the market elsewhere, Brent crude and West Texas Intermediate crude rebounded after reaching new lows following OPEC's decision last week not to cut oil production to address falling prices. Following the pick-up in prices, oil stocks rose, including Afren and Genel Energy.
In the US, Federal Reserve chair Yellen spoke in Washington but made no comment on the current economic conditions or outlook for monetary policy.
Elsewhere in the US, data showed construction spending rose 1.1% in October following a revised 0.1% fall in October, compared to forecasts for a 0.6% increase.
The Institute for Supply Management-New York reported that current business conditions rose to 62.4 in November, up from 54.8 the previous month, more than the reading of 55 predicted by analysts.
BP and Shell gain on merger rumours
BP and Shell rallied on reports that the two oil giants may merge.
Deutsche Lufthansa slumped after saying a pilot strike that began on Monday will affect all routes on Tuesday until midnight.
Friends Life Group jumped after Aviva agreed to buy the company for about ?5.6bn in stock.
Neopost SA declined after saying it expects organic revenue this year will be somewhat stagnant, down from a previous target of 1% to 3% growth. |
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| | US Market Report | | US open: Stocks edge higher despite retreat in crude futures The main US stock market gauges were registering small gains on Tuesday in what was expected to be a light day in terms of economic data and as investors continued to digest the recent sharp drop in the oil price.
Speaking at The Wall Street Journal's CEO Council, US Federal Reserve vice chairman Stanley Fischer said the moment for the central bank to withdraw its references to the continuing need to maintain interest rates low for a "considerable time" was nearing.
The Dow Jones Industrials was advancing by 47 points to 17,824, while the S&P 500 was to be seen 9 points higher at 2,062.
The Federal Open Market Committee is weighing economic data as it considers when to raise rates after ending its bond buying programme at its last meeting.
Figures released on Tuesday morning revealed that US construction spending grew by 1.1% on the month in October, ahead of analysts' estimates for a rise of 0.6%.
Meanwhile, hopes that the European Central Bank (ECB) may introduce full-blown quantitative easing soon were raised after President Mario Draghi said he would consider buying government bonds if inflation remains dangerously low for too long.
Bets on the prospect for further stimulus in China had also grown following the release of weak economic data, including a slowdown in manufacturing activity.
Acting as a backdrop, West Texas Intermediate crude futures were slipping by 2.29% to hit $67.42 on NYMEX following Monday's small bounce.
That came as analysts at Credit Suisse cut their forecast for the price of Brent oil in 2015 to $75.25 per barrel from $91.50 previously.
Fiat Chrysler Automobiles NV jumped after Transport Ministry data showed a 5.9% rise in car sales in November in Italy.
Avanir Pharmaceuticals rose after Japan's Otsuka Holdings Co. agreed to buy the Aliso Viejo, California-based drugmaker for about $3.54bn. |
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| | Broker Tips | | Broker tips: Vodafone, Aviva, Northgate Following reports the Vodafone (VOD) is exploring a possible combination with Liberty Global, UBS has said the UK telecoms group may have to wait until its shares rise before undertaking such a sizeable deal.
"Near-term, we think the focus for VOD is on driving organic growth, integrating recent acquisitions and executing on Project Spring [investment programme]. Until the VOD share price is notably higher, it may be difficult for VOD to undertake a transformational deal," UBS analysts Polo Tang and Michael Hill said.
Shore Capital has raised questions with Aviva's 5.6bn takeover of Friends Life, after the companies announced the details of the all-share bid on Tuesday.
The broker said that the deal is a "rights issue in disguise" for Aviva, as it reiterated its 'sell' rating on the insurer. It said: "We remain puzzled why Aviva felt the need to do it now. Is it a camouflage for issues within its own internal restructuring and turnaround story?"
Peel Hunt has repeated its 'buy' call for Northgate after the vehicle hire group's interim results impressed the market on Tuesday, with the broker lifting its estimates for the full year. | | |
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