Energy shares climb as Brent crude holds above $61 a barrel

Wednesday 08:10 GMT

What you need to know

• Oil’s sustained rally to above $61 lifts energy stocks
• Strong earnings reports continue to underpin equity markets
• Dollar ticks higher ahead of Fed rates announcement
• US central bank expected to leave policy on hold
• Meeting overshadowed by wait for nomination of next Fed chair

Leading quote

“The start of November has the potential to excite investors — not just decisions by the Fed and MPC but perhaps a tweet from the president announcing the new Fed Chair and further insights from Congress about the potential for tax cuts,” says Andrew Milligan, head of global strategy, Standard Life Investments.

“But underneath it all the deep throb of the engine driving stock markets higher is the steady stream of positive company earnings reports.”

Hot topic

Oil’s ascent over $61 is making its presence felt on equities markets, where energy stocks are making gains.

Brent Crude, the international marker, is up 0.5 per cent to $61.24, within reach of the previous session’s high of $61.41, its highest level since July 2015 and setting it on course for its seventh straight day of gains.

The recovery — driven by improving demand and the Opec-led package of supply curbs — is drawing energy stocks to the top of leader boards on stock markets around the world.

The Euro Stoxx oil and gas index is up 0.8 per cent, outrunning a rise of 0.3 per cent on the wider Euro Stoxx 600. Shares in BP are up 0.1 per cent, with Tullow Oil up by over 3 per cent and Eni rising by 0.9 per cent.

Sydney’s S&P/ASX Energy index added 1.3 per cent as the price of oil headed for its seventh straight day of gains. Beach Energy rallied 7.7 per cent while Origin Energy advanced 1.8 per cent.

Shanghai’s China Petroleum is up 2 per cent, with PetroChina adding over 1 per cent.

Equities

European bourses are to rising, taking their cue from a stronger showing in New York, where earnings reports continued to impress and from a rally in Asia.

London’s FTSE is up 0.4 per cent and Frankfurt’s Xetra Dax 30 rising 0.9 per cent.

South Korea’s Kospi Composite is standing out in Asia up 1.1 per cent. The Topix index in Japan is up 0.9 per cent. In Australia, the wider S&P/ASX 200 index is 0.5 per cent higher.

Forex

The dollar is ticking higher as traders continue to wait for the White House’s nomination for the next chair of the Federal Reserve. Speculation on the candidate’s identity is over shadowing the US central bank’s November policy meeting, at which it is expected to leave rates on hold.

The euro is flat at $1.1642 and sterling is up 0.1 per cent at $1.3289.

The New Zealand dollar has strengthened by as much as 1 per cent after the latest labour market statistics showed wages rose and unemployment fell in the September quarter.

The kiwi passed the $0.69 mark against the US currency to an intraday high of $0.6913.

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