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BP and Shell drag FTSE 100 higher as oil prices recover

The FTSE 100 rose by 95.64 points to 5849.42.

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Oil shares were some of the best performers on Tuesday (Jane Barlow/PA)

Oil shares were some of the best performers on Tuesday (Jane Barlow/PA)

Oil shares were some of the best performers on Tuesday (Jane Barlow/PA)

Global markets had a fairly bullish day on Tuesday, as investors hoped that countries might start to ease their coronavirus lockdowns.

The FTSE 100 ended the day on 5849.42 points, up 95.64 or 1.7%.

London’s top index floated on oil, as major producers BP and Shell notched up strong wins.

The companies owed their fortunes to the price of oil, which rallied on signs that demand might be picking back up.

The price of a barrel of Brent crude, the international standard, rose by around 10%, climbing above 30 dollars for the first time in weeks.

Oil prices have been depressed all year, falling to below 19 dollars last month, as the coronavirus lockdown pushed down demand.

“Firmly focused on the various lockdown easing measures being implemented, or set to be implemented, around the globe, the markets kept up their rebound throughout Tuesday,” said Connor Campbell, an analyst at Spreadex.

About four million people were expected to go back to work after Italy on Monday launched the second phase of its plan to re-open the country, which was the site of Europe’s first major Covid-19 outbreak.

By the time they closed on Tuesday, most European indices had made up ground after being pushed lower by a decision from Germany.

The country’s constitutional court ruled against a stimulus package from the European Central Bank (ECB), saying it was illegal under EU treaties.

It means that Germany’s central bank will be unable to co-operate on some parts of the programme.

“This could be a speed bump for the ECB as the body is keen to keep the show on the road.

“It also leaves open the possibility that the pandemic stimulus package could also face legal challenges,” said David Madden, an analyst at CMC Markets.

Some of the biggest markets in Europe notched up FTSE-beating wins for the day. The German Dax index rose 2.5%, with France’s Cac up 2.4%.

This could be a speed bump for the ECB as the body is keen to keep the show on the roadDavid Madden, CMC Markets

Across the pond, the Dow Jones and S&P 500 were trading up around 1.6% and 1.8% respectively, shortly after markets closed in the UK.

The pound was practically flat against the dollar at 1.2448, but gained 0.6% against the euro to 1.1479.

In company news, shares were remarkably unchanged as Workwear group Johnson Service said it lost 97% of its sales in the hospitality sector last month as restaurants and hotels shut down. The company’s shares lost 0.3% of their value.

It was very different for Air Partner, whose shares soared by 27% after it reported a “record month” in April.

The company said that, unlike a struggling travel industry, it had been boosted by repatriation flights and moving vital medical equipment between countries.

Low-cost airline Ryanair also saw a small gain, up 2.5% despite revealing that it carried 99.6% fewer passengers in April. Only 40,000 people flew with the firm last month, as the air industry was brought to a standstill.

Wizz Air also saw a slight rise, 0.4%, after saying it would launch six new routes serving Luton Airport from next month.

Housing services group Mears jumped 4% after bosses said operating losses during the lockdown will be “modest”, even though the company moved to an “emergency only” service.

The biggest risers on the FTSE 100 were BP, up 18.3p to 318.9p, Shell “A”, up 70.2p to 1,335.6p, Melrose Industries, up 5.08p to 98.76p, Shell “B”, up 61.8p to 1,283.4p, and Informa, up 20.2p to 436.2p.

The biggest fallers on the FTSE 100 were IAG, down 7.95p to 195.95p, JD Sports, down 17.6p to 505.2p, Next, down 157p to 4,595p, Barratt Developments, down 17.2p to 517.2p, and Smurfit Kappa, down 44p to 2,408p.

PA