Energy and banking stocks propelled Britain's FTSE 100 higher on Thursday as commodities trading giant Glencore made its London Stock Exchange debut. As the London market closed, Glencore's shares on the grey market were trading around the widely expected launch price of 530 pence.
Glencore will be added to the FTSE 100 index as from the start of dealings on May 25. FTSE will issue a notice after the market close on Friday May 20 detailing which stock will be removed to make way for Glencore, based on closing prices that day. Likely candidates for demotion include Investec, which was up 5.4 percent, and Invensys, which fell 3.1 percent after both reported full-year results.
The FTSE 100 index closed up 32.50 points, or 0.6 percent, higher at 5,955.99 but off its session high of 6,003.92, and having advanced 1.1 percent in the previous session, snapping a five-session losing streak. "The index found support around the 50-day moving average (5,928), but the lingering concerns over European debt, Middle East unrest and commodity demand from emerging markets will stunt progress," said Jimmy Yates, head of equities at CMC Markets.
Integrated oils fuelled the majority of gains on London's blue chip index as analysts continued to talk up buying opportunities in the sectors after the recent sell off. BP rose 1.6 percent as Bank of America Merrill Lynch upgraded the oil major to "buy" from "neutral", after the collapse of BP's Arctic deal with Russia's Rosneft. "The risk/reward on the stock is skewed to the upside based on a combination of compelling valuation, upside from a resolution to the Rosneft deal, which we see positive either way and growth opportunities medium term," the broker says.
Oil services firm Petrofac climbed 3.9 percent as Collins Stewart raised its rating to "buy" on valuation grounds and future earnings potential. Temporary power provider Aggreko was 3.4 percent higher with traders citing a bullish note from Goldman Sachs, which added the stock to its conviction buy list.
Banks, which have been a laggard recently, rose as some risk appetite returned. Barclays gained 2.5 percent. Elsewhere, ITV was up 4 percent, after Bernstein Research raised its recommendation on the free-to-air broadcaster to "outperform", citing valuation grounds.
Wall Street, however, was muted, weighing on London's gains after data showed factory activity in the US Mid-Atlantic region grew much more slowly than expected in May, offsetting a fall in new claims for unemployment benefits.
Although Glencore's London float stole the headlines, shares of LinkedIn Corp surged more than 100 percent in their public trading debut on Thursday in New York, a jump reminiscent of the heyday of investors' love affair with Internet stocks in the late 1990s.
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