One of the main stories from today was the continued rally from oil, following yesterday’s triumphant deal in which OPEC (the Organisation of the Petroleum Exporting Countries) agreed to cut oil output for the first time since 2008. As the London markets opened, oil was sitting around the $51.50 p/bbl mark and as we write it is now 6.5% higher for the session at $54.27 p/bbl, a level last reached back in July 2015. Usually the FTSE tends to mirror such significant moves in commodities due index being weighted heavily in resource based firms, but today the main index closed 0.45% lower, with other main European indices following. One reason for this contradictory movement was the pound strengthening from Brexit chatter, after it was said the UK would be willing to make payments to the EU’s budget in order to secure the best possible trade access. Another reason will be the worry at the back of investors’ minds ahead of the constitutional reform in Italy on Sunday.
In company news, Rolls-Royce has announced further job cuts in its Marine division. The attempt to cut losses will see a further 800 jobs lost. Shares finished the day 0.81% higher.
Shares in Severn Trent slipped after its shares traded without rights in their last dividend payouts. They closed the day 3.38% lower.
Nestle have claimed a scientific breakthrough will allow them to massively reduce the amount of sugar in their products, by up to as much as 40%. They also claim this won’t affect the taste. The Swiss firm plan to introduce this ‘game changer’ in 2018.
UK house price growth has slowed to its lowest rate since January according to Nationwide. November’s houses were 4.4% higher than a year earlier (vs 4.6% higher in October). The average cost of a home in the UK now stands at £204,947.
PMI data for UK manufacturing was released this morning, showing that growth slowed during November. The PMI was 53.4, compared to 54.2 in October (estimates were 54.3), although again anything above 50 still indicates growth. Unsurprisingly demand from overseas has increased.