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May 7, 2020, 10:15 a.m. EDT

Rising oil prices help drive FTSE 100 shake off Bank of England’s dire forecast

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By Barbara Kollmeyer, MarketWatch


Bloomberg
A pedestrian wearing a protective face mask passes the Bank of England (BOE) in the City of London, U.K., on Wednesday, May 6, 2020.

A dire economic forecast from the Bank of England didn’t get in the way of gains for London stocks on Thursday, with rising oil prices lifting big energy names and retailers also getting a lift.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.50%  rose 1% to 5,912, while the British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.2246% erased earlier gains to trade flat at $1.2335. The pound rose initially after the Bank of England left key interest rates and its 200 billion pound ($247 billion) bond-buying program in place, but also delivered a grim economic assessment.

Analysts at Citi and elsewhere say the central bank’s pause may last as little as a month because two of the nine members of the Bank of England’s monetary policy committee wanted an extra 100 billion pounds of purchases. That’s as the central bank warned of a record recession.

“Any forecast is guesswork in these unprecedented times, but the Bank of England’s gloomy assessment concurs with my own view that forecasters are underestimating the depth of the recession in the UK and across the developed world,” said Steven Bell, chief economist at at BMO Global Asset Management.

London stocks stepped up with the rest of the world’s equities, brushing off news of another 3.2 million U.S. layoffs in weekly data, as investors cling to the hopes of a post-pandemic recovery. U.S. stocks /zigman2/quotes/210598065/realtime DJIA -0.58%   rose 1% in early trading, while the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.02%  gained 0.9%.

Rising oil prices /zigman2/quotes/211629951/delayed CL.1 -0.96%  lifted key heavyweights in London, with BP PLC /zigman2/quotes/207305210/composite BP -2.06%   /zigman2/quotes/202286639/delayed UK:BP -0.34%  up nearly 5% and Royal Dutch Shell Group PLC /zigman2/quotes/205095589/composite RDS.A -2.07% /zigman2/quotes/204253697/delayed UK:RDSB +0.29%  gaining 4%. Other resource stocks also rose, with Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL -0.60%  up nearly 6% after a surprising rise in Chinese exports.

Read: Coronavirus leaves the U.K.’s top statisticians guessing the rate of inflation

Shares of BT Group /zigman2/quotes/209006687/delayed UK:BT.A +0.16%  led decliners with a 7% fall after the telecom said it would suspend its dividend until 2022 to fund a restructuring plan and deal with the pandemic. But as well, deal news depressed shares.

Telefónica /zigman2/quotes/207034643/composite TEF +1.60%   /zigman2/quotes/200416613/delayed ES:TEF +0.65%  U.S. tycoon John Malone’s cable group Liberty Global /zigman2/quotes/205000522/composite LBTYA -1.85%  announced a merger their U.K. operations — O2 and Virgin Media — in a 50-50 joint venture, which means competition for BT.

The retail side was also perking up with JD Sports Fashion /zigman2/quotes/207007202/delayed UK:JD -1.31%  , Burberry Group /zigman2/quotes/205386705/delayed UK:BRBY 0.00%  and Next PLC /zigman2/quotes/200704121/delayed UK:NXT -1.43%  all up around 4%.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,331.34
-31.59 -0.50%
Volume: 192,872
Nov. 27, 2020 10:40a
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/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3328
-0.0030 -0.2246%
Volume: 0.0000
Nov. 27, 2020 5:55a
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,872.47
-173.77 -0.58%
Volume: 324.19M
Nov. 25, 2020 5:33p
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/zigman2/quotes/210599654/delayed
XX : STOXX
391.57
-0.06 -0.02%
Volume: 0.00
Nov. 27, 2020 11:40a
loading...
/zigman2/quotes/211629951/delayed
US : U.S.: Nymex
$ 45.27
-0.44 -0.96%
Volume: 214,421
Nov. 27, 2020 5:45a
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/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 21.41
-0.45 -2.06%
Volume: 14.15M
Nov. 25, 2020 7:00p
P/E Ratio
N/A
Dividend Yield
8.73%
Market Cap
$71.98 billion
Rev. per Employee
$3.99M
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/zigman2/quotes/202286639/delayed
UK : U.K.: London
262.60 p
-0.90 -0.34%
Volume: 16.13M
Nov. 27, 2020 10:40a
P/E Ratio
N/A
Dividend Yield
5.99%
Market Cap
£53.79 billion
Rev. per Employee
£3.11M
loading...
/zigman2/quotes/205095589/composite
US : U.S.: NYSE
$ 36.34
-0.77 -2.07%
Volume: 5.26M
Nov. 25, 2020 7:00p
P/E Ratio
N/A
Dividend Yield
4.47%
Market Cap
$138.24 billion
Rev. per Employee
$4.11M
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/zigman2/quotes/204253697/delayed
UK : U.K.: London
£ 1,302.60
+3.80 +0.29%
Volume: 1.72M
Nov. 27, 2020 10:40a
P/E Ratio
N/A
Dividend Yield
0.04%
Market Cap
£103.31 billion
Rev. per Employee
£3.21M
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/zigman2/quotes/201381512/delayed
UK : U.K.: London
2,253.00 p
-13.50 -0.60%
Volume: 391,000
Nov. 27, 2020 10:40a
P/E Ratio
16.86
Dividend Yield
2.49%
Market Cap
£28.45 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209006687/delayed
UK : U.K.: London
122.50 p
+0.20 +0.16%
Volume: 6.40M
Nov. 27, 2020 10:40a
P/E Ratio
8.07
Dividend Yield
0.00%
Market Cap
£12.44 billion
Rev. per Employee
£216,629
loading...
/zigman2/quotes/207034643/composite
US : U.S.: NYSE
$ 4.45
+0.07 +1.60%
Volume: 4.91M
Nov. 25, 2020 7:00p
P/E Ratio
79.04
Dividend Yield
8.79%
Market Cap
$23.18 billion
Rev. per Employee
$476,162
loading...
/zigman2/quotes/200416613/delayed
ES : Spain: Madrid
3.72
+0.02 +0.65%
Volume: 3.01M
Nov. 27, 2020 11:40a
P/E Ratio
69.13
Dividend Yield
8.71%
Market Cap
€19.48 billion
Rev. per Employee
€425,430
loading...
/zigman2/quotes/205000522/composite
US : U.S.: Nasdaq
$ 22.77
-0.43 -1.85%
Volume: 1.52M
Nov. 25, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.95 billion
Rev. per Employee
$571,361
loading...
/zigman2/quotes/207007202/delayed
UK : U.K.: London
722.00 p
-9.60 -1.31%
Volume: 289,012
Nov. 27, 2020 10:40a
P/E Ratio
37.08
Dividend Yield
0.00%
Market Cap
£7.25 billion
Rev. per Employee
£107,803
loading...
/zigman2/quotes/205386705/delayed
UK : U.K.: London
1,719.50 p
0.00 0.00%
Volume: 207,167
Nov. 27, 2020 10:40a
P/E Ratio
337.82
Dividend Yield
0.00%
Market Cap
£6.90 billion
Rev. per Employee
£250,748
loading...
/zigman2/quotes/200704121/delayed
UK : U.K.: London
6,482.00 p
-94.00 -1.43%
Volume: 36,752
Nov. 27, 2020 10:39a
P/E Ratio
25.27
Dividend Yield
0.00%
Market Cap
£8.35 billion
Rev. per Employee
£149,455
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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