The FTSE 100 Index held on to strong gains in the previous session today as a bullish start for Wall Street and an oil price bounce helped blue-chip shares recover from earlier turbulence.
A volatile session on Tuesday hit by jitters over the price of oil and the slide in value of the Russian rouble had seen the index close 2.5% ahead.
The latest session saw it earlier fall by nearly 100 points but recover to close 4.6 points up at 6336.5. Oil climbed back above the 60 US dollars mark for a barrel of Brent crude.
Germany’s Dax was in the red but France’s Cac 40 was ahead and New York’s Dow Jones Industrial Average advanced strongly as traders anticipated the latest move by the US Federal Reserve.
Nerves continued to be frayed by the financial crisis in Russia, with the rouble having lost 15% of its value this week – though it regained some of this today after the finance ministry intervened to support the currency by selling foreign reserves.
The global uncertainty still left shares in British Airways owner International Airlines Group down by 4%, or 18.6p to 443.6p, while British American Tobacco was off 52.5p to 3365p.
The pound was under pressure against the greenback after rising in the previous session on signs that sterling has been a beneficiary of the switch out of the rouble.
It declined by a cent to just under 1.57 US dollars as the December minutes of the Bank of England’s Monetary Policy Committee reinforced expectations that interest rates will not rise from their record low before late-2015.
Policymakers said inflation was expected to remain below 1% for several months, while pay growth had further to go before inflation was likely to head back up to its 2% target, implying interest rates would stay low.
However sterling was ahead against the single currency – which has been hit by expectations of more eurozone stimulus measures in the new year – at a little over 1.26 euros.
Oil stocks led the way in the FTSE 100 as Brent crude recovered, with exploration firm Tullow Oil up 4%, or 13.7p, to 395.1p, heavyweight BP up 13.6p to 397.6p and Royal Dutch Shell ahead 61.5p to 2155.5p.