By Barbara Kollmeyer, MarketWatch
London stocks were set to end the week on a high note on Friday, as appetite for risk among investors helped boost global equities and oil prices, which in turn triggered gains for heavily-weighed energy companies.
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.62% surged 1.5% to 6,319.78, with the index set to gain 3.5% for the week after a 5.8% plunge in the prior five-day period. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.3016% dropped 0.3% to $1.2386.
London stocks tracked gains that drove Dow futures higher by over 300 points and the Stoxx Europe 600 index by 1%, and U.S. /zigman2/quotes/211629951/delayed CL.1 -1.50% and Brent crude pricesby 3% and 2.6%, respectively.
Equities and oil rallied after Bloomberg reported that China will increase its buying of U.S. soybeans, corn and ethanol in line with a phase-one trade deal, which got delayed by the pandemic. That comes after talks between Secretary of State Mike Pompeo and China’s top foreign policy official in Hawaii this week.
President Donald Trump on Thursday said in a tweet that the U.S. could completely decouple from China, a day after his top trade adviser said such a move wouldn’t be a reasonable policy.
Also helping oil was optimism over the outcome of a Thursday meeting of Organization of the Petroleum Exporting Countries members and allies about adherence to a global production cut pact. BP /zigman2/quotes/207305210/composite BP +0.70% /zigman2/quotes/202286639/delayed UK:BP +1.99% and Royal Dutch Shell Group /zigman2/quotes/205095589/composite RDS.A -0.05% /zigman2/quotes/206428183/delayed UK:RDSA +1.51% rose 0.9% each.
Investors overlooked some bleak data showing that the U.K. public debt shot past gross domestic product for the first time since the early 1960s, noted Russ Mould, investment director at AJ Bell, in a note to clients.
“Although it is very cheap for the Government to borrow right now, the news highlights the challenge it will face in maintaining spending to support businesses and the public at a time of acute need while also making some attempt at balancing the books,” he said.
Heavily weighted HSBC /zigman2/quotes/208272822/composite HSBC -1.14% gained nearly 2%, while elsewhere drinks maker Diageo /zigman2/quotes/205449809/delayed UK:ULVR +1.10% /zigman2/quotes/205611832/delayed UK:DGE +2.19% jumped 2% and consumer products giant Unilever rose 1.4%.
Better news came from retail sales and consumer confidence data, which both showed improvement in May.