Equities rally as oil prices move from multi-year lows

Global equity markets rallied yesterday as oil prices moved away from multi-year lows, though investors remained mindful of the possibility for more volatility ahead of a widely anticipated increase in US interest rates later this week.

Oil reversed early falls as bargain hunters moved in after the price of crude dropped to its lowest level since December 2008 in the prior session. The bounce helped lift equities in both the US and the Europe.

DUBLIN The Dublin market had a better day in general, but under-performed its European peers. The Iseq closed up 1.01 per cent, or 66.36 points, at 6656.32. This was slightly behind France, Germany and the UK which all rose more than 2.5 per cent.

Ryanair had a big rally in the afternoon, which it held on to going into the close. It closed up 2.3 per cent at €14.67.

Smurfit Kappa underperformed its peers in the UK, which had very good days. The packaging company finished up 0.5 per cent at €23.20.

CRH which has been upgraded by Goldman Sachs rose 1.05 per cent to €25.93.

Real estate investment trusts are under pressure according to one stockbroker, who noted a disappointing performance from Green Reit, Hibernia Reit and Ires Reit. Green Reit declined 1.5 per cent to close at €1.55, Hibernia Reit fell 0.6 per cent to €1.37, Ires Reit was down 0.3 per cent at €1.09.

LONDON

Britain’s shares rose for the first time in weeks, rallying from a 2012 low, helped by advancing shares of almost all FTSE 100 Index companies.

J Sainsbury rallied 5.2 per cent after retail research firm Kantar Worldpanel said the company "stands out" heading into Christmas. Wm Morrison Supermarkets increased 4.9 per cent. Glencore added 3 per cent after JPMorgan Chase upgraded the stock to overweight, the equivalent of a buy.

The FTSE 100 climbed 2.5 per cent, the most since October 5th, to 6,017.79 at the close. It plunged 4.6 per cent last week, a second weekly decline, amid a rout in global equities and commodities.

EUROPE

European stocks rallied the most since October 5th as investors bet that the US economy is strong enough to cope with the Federal Reserve’s expected first interest rate increase in almost a decade.

Volkswagen added 1.7 per cent after it posted a 4.2 per cent increase in November sales, even as it suffered its biggest decline in monthly European market share since September's emissions scandal.

Syngenta advanced 2.2 per cent as China National Chemical was said to be weighing a new bid. Sanofi rose 5.3 per cent after saying it is in talks to swap assets with Germany's Boehringer Ingelheim in a €22.8 billion transaction.

The Stoxx Europe 600 Index advanced 2.9 per cent to 359.58 at the close of trading, snapping a five-day losing streak.

Germany’s DAX Index and France’s CAC 40 were among the biggest gainers, rising at least 3.1 per cent.

US

US stocks rose for a second day as energy companies rallied with crude oil, while Federal Reserve officials start a two-day meeting at which they are widely expected raise rates for the first time since 2006.

Chevron and Exxon Mobil gained more than 3.2 per cent in early trading, taking their two-day advances to more than 6 per cent.

Financial shares increased as concern over turmoil in high-yield bonds abated, with asset managers Affiliated Managers Group and Franklin Resources rebounding at least 1.2 per cent. 3M fell 4.8 per cent, weighing on industrials after cutting its profit forecast.

At 15:23 GMT, the Dow Jones industrial average was up 203.04 points, or 1.17 per cent, at 17,571.54. The S&P 500 was up 25.08 points, or 1.24 per cent, at 2,047.02. The Nasdaq Composite index was up 58.52 points, or 1.18 per cent, at 5,010.74.

– Additional reporting: Bloomberg, Reuters