EmailIn a tumultuous week for the markets, even by recent standards, leading shares mounted a revival on Friday, helped by a recovery in oil shares as the recent fall in crude prices stabilised.
The FTSE 100 added 114.38 points to 6310.29, a 1.85% rise which meant it lost just 29 points over the week, albeit it was the fourth weekly loss in succession.
But that masks the volatility which hit the markets as investors grew increasingly concerned about a global economic slowdown, particularly in the eurozone and the US.
At its lowest during the week the FTSE dropped to just 6072, effectively in correction territory after a 10% fall from its recent peak. The highest point it reached last week was 6404.
Michael Hewson, chief market analyst at CMC Markets UK, said:
European markets have continued the positive spill over from [Thursday’s] comments by Federal Reserve policymaker James Bullard about the possibility of extending QE, and... end a turbulent week on a much more positive note, with further comments from Bank of England Chief economist Andrew Haldane about the prospects for low interest rates for longer helping support stock markets.
Investors appear to be taking heart from the belief that central bankers are listening to their concerns about a premature tightening of monetary policy.
It is does speak to a larger problem though with respect to who controls financial markets in that in the first sign of significant volatility central bankers feel compelled to offer soothing words of comfort in the manner of an adult trying to calm a sulky child with the offer of more sweets.
Tullow Oil was the biggest gainer of the day, up 40.1p to 524p after Oriel Securities issued a buy note. The broker said:
Following our meeting with Tullow’s chief financial officer, Ian Springett, we maintain our investment thesis on the company. We fully acknowledge that the current uncertain environment is not best suited for companies with no free cash flow, but we expect that as soon as we see stabilisation in the oil price (whenever that may be), Tullow will be among the best value plays in the sector.
Meanwhile as Brent crude edged up 0.29% to $86 a barrel, BP added 8.5p to 428.5p and Royal Dutch Shell A shares rose 83p to £21.49.
Elsewhere Royal Mail added 19.1p to 431.7p as Morgan Stanley raised its recommendation from underweight to equal weight, saying:
Although we believe Royal Mail continues to face many challenges, following the fall in the share price, the risk-reward is now more balanced. We await the outcome of the regulatory review and the development of the peak season.
But Rolls-Royce slumped 108.5p to 832p after it warned on profits.
