Rising commodities prices lifted shares in London on Friday at midday, with mining and oil companies leading the FTSE 100.
The FTSE 100 index was up 10.54 points, 0.1%, at 7,757.83. The FTSE 250 was up 59.38 points, or 0.3%, at 19,633.49, and the AIM All-Share was up 1.78 points, or 0.2%, at 853.87.
The Cboe UK 100 was up 0.1% at 776.04, the Cboe UK 250 was up 0.2% at 17,135.19, and the Cboe Small Companies was down 0.1% at 13,600.86.
The global oil market is likely to have a significant surplus of crude oil at the beginning of the year, according to the International Energy Agency.
Supply is likely to exceed demand by about 1 million barrels a day in the first three months of 2023, according to an IEA monthly report published on Wednesday.
The experts have also slightly raised the demand forecast for China. Though, faster growth in demand for crude oil is not expected in the world’s second-largest economy until the spring.
Supply concerns due to tighter Russian sanctions were also contributing to the rise in oil prices.
Brent oil was quoted at $86.80 a barrel at midday in London on Friday, from $85.36 late Thursday. Over the course of the week thus far, brent has risen 3.6%.
BP was up 0.4% at midday, while peer Shell was 0.1% higher. Gas distribution firm DCC added 0.7%.
Gold was quoted at $1,928.93 an ounce, sharply higher against $1,919.03.
Miners Fresnillo, Rio Tinto, and Antofagasta were up 1.8%, 0.6%, and 0.5%, respectively at midday.
Elsewhere in the FTSE 100, SSE added 1.6% after the electricity utility increased its adjusted earnings per share expectations for its financial 2023 ending March 31.
SSE now expects adjusted earnings of 150 pence, up 25% from the previously anticipated 120p and 57% higher than the 95.4p recorded in financial year 2022.
In the FTSE 250, Spirent Communication plunged 16% as it noted some hesitance among its clients for the first half of 2023.
The firm explained that global economic conditions have caused some of its customers to delay their investment decisions in the new year. As a result, it now expects its annual performance to have a ‘heavier than usual’ weighting towards the second half of 2023.
In 2022, however, the provider of testing, analytics and security for telecommunications networks said its results were in line with expectations.
Revenue is expected to come in at $607 million, which is a 5.5% rise from $576.0 million in 2021.
Asos jumped 8.3% after Bank of America raised the online fashion retailer to ’buy’ from ’underperform’.
Bank of America also raised its fast fashion peer boohoo to ’buy’ from ’neutral’. The stock was 6.1% higher at midday.
Among the smaller-cap companies, De La Rue dropped 5.5%.
For the next twelve months, De La Rue has suspended banknote printing operations in Kenya on reduced demand. It operates in the country through a joint venture with the Kenyan government, in which the Nairobi government holds a 40% equity share.
De La Rue continues to operate with three banknote sites in the UK, Malta and Sri Lanka. This is a reduction from five sites operating in 2020.
On AIM, DSW Capital plummeted 23% after it said it no longer expects to meet current market expectations for the year after a worsened performance over the second half.
For the year ending March 31, 2023, DSW now expects revenue between £2.8 million and £3.1 million, versus £3.0 million the year prior.
Earnings before interest, tax, depreciation and amortisation are expected to be between £1.4 million and £1.7 million, down from £2.2 million the previous year.
DSW attributed the downturn in performance to several factors, including a worse-than-expected Christmas period.
The pound was quoted at $1.2364 at midday on Friday in London, essentially unchanged compared to $1.2363 at the close on Thursday.
Sterling remained steady despite fresh economic data painting a gloomy picture about the UK economy.
According to the latest data released by the Office for National Statistics, UK retail sales volumes are estimated to have fallen by 1.0% in December from November.
Markets had expected retail sales volumes to rise by 0.5% monthly in December, according to FXStreet.
In addition, GfK’s UK consumer confidence indicator dipped to a near-historic low in January.
For ING’s Francesco Pesole, the figures showed that the UK economy is still showing signs that it is headed for recession through 2023.
In European equities on Friday, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was up 0.4%.
The euro stood at $1.831, higher against $1.0795. Against the yen, the dollar was trading at JP¥129.88, higher compared to JP¥128.45.
Stocks in New York are expected to be mixed at the open on Wall Street following hawkish rhetoric from a top US Federal Reserve official.
The Dow Jones Industrial Average is called down 0.1%, the S&P 500 index flat, and the Nasdaq Composite up 0.3%.
Federal Reserve Vice Chair Lael Brainard said on Thursday that interest rates will need to remain high for some time, even as inflation eases.
‘Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time,’ Brainard said in prepared remarks for an event in Chicago. This is to ensure inflation returns to two percent on a sustained basis, she said.
The Fed has raised the benchmark lending rate rapidly from around zero to 4.25% to 4.50%.
Brainard’s latest remarks suggest rates will have to stay high for a while. Analysts at LLoyds Bank noted that Brainard is usually considered to be a dovish rate-setter.
Still to come on Friday’s economic calendar, there is Canadian retail sales data at 1330 GMT.
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