By Chris Dorrell
London markets edged into the green at the start of the week as higher oil and gas prices lifted the FTSE’s energy giants.
The FTSE 100 closed 0.41 per cent higher at 7,630.63 while the FTSE 250, which is more aligned with the health of the domestic economy, rose 0.37 per cent to 17,519.39.
Oil was trading at just over $90 a barrel as investors assess the impact the Israel-Hamas conflict will have on global supply.
Wholesale gas prices meanwhile hit their highest levels since February at the end of last week after the closure of a gas field in Israel. Firms are also bracing for a spike in demand after temperatures plummeted over the weekend.
This acted as a tailwind to the Shell and BP, which climbed 1.1 per cent and 0.2 per cent. SSE and Harbour Energy also recorded gains.
The FTSE 100’s natural resource miners recorded healthy gains as well. Anglo American rose 1.9 per cent while Rio Tinto climbed 2.8 per cent.
Despite the gains, sentiment remained cautious as investors feared the impact of an escalation in the conflict between Israel and Hamas.
“Investors are braced for volatility ahead amid fears that Hezbollah militants could attack Israel over its operations in Gaza,” Susannah Streeter, head of money and markets, Hargreaves Lansdown said.
“US Secretary of State Antony Blinken has been on a whistlestop tour of countries around the Middle East, stressing that all leaders want to see the conflict contained, but there is clearly still concern about the risks of contagion,” she continued.
In the UK, there are two crucial pieces of inflation which will help markets judge whether the Bank of England has finished with its interest rate hikes.
Tomorrow the latest wage growth figures will be revealed, with experts predicting wage growth will remain elevated while unemployment will tick up. This will be followed by September’s inflation figures. Economists predict another slight fall in the annual rate of inflation thanks to falling food prices.
On the FTSE, Frasers Group once again raised its stake in online fashion brand Boohoo. The Sports Direct owner upped its share in the group from 13.4 per cent to 15.1 per cent.
The fashion powerhouse, which also owns Jack Wills, has been rapidly increasing its stake in the popular clothing site.
Frasers shares closed 0.5 per cent higher while Boohoo shares were up 2.8 per cent.
