TheStreet-News.Com offers all the latest stock market news and currencies market news

Rising oil price pushes up commodities stocks

The FTSE 100 hit a three-month high on the back of Russia’s latest oil deal with Saudi Arabia, which sent Brent Crude up 3.9pc.

ADVERTISING

Commodities-related stocks were already topping the FTSE league tables even before the deal emerged and boosted oil prices further, as investors hoped the economic crunch which shook markets at the start of the year could be showing signs of unwinding.

Relatively healthy Chinese economic data boosted the shares from the start of the week and a mini-rally in commodities prices helped lift the shares further.

China’s latest bid to cut steel production by as much as 18pc gave heart to markets desperate for a fall in the surplus capacity which has trashed commodities prices and devastated miners’ stocks. Modest rises across other commodities including iron ore helped spread that good feeling more broadly.

The upbeat sentiment was felt most strongly by Anglo American which led the FTSE 100, rising by an impressive 9.2pc.

The stock was boosted by impressive results from the latest auction of diamonds by De Beers, the renowned and historically important miner which is 85pc owned by Anglo.

The auction raised $660m for the company and took its total raised so far this year to $1.8bn, firmly up on the $1.5bn raised in the same period of 2015.

Investec described the sale as “an encouraging result, particularly if the speculated 2pc price rise was also implemented at the auction.”

Last year the diamond market was hit by deferrals and price cuts, but the sector is showing some signs of stabilising this year.

Modest price rises across the industrial commodities also hinted at some of the much-longed for stabilisation which miners are praying for, pushing up their stocks.

Glencore’s shares rose by 5pc while BHP Billiton’s were up 3.9pc and Fresnillo joined them in the top five on the FTSE 100 with gains of 3.23pc.

Among smaller listed firms Lonmin performed particularly strongly with its shares jumping 7.74pc.

The move came as the company announced the departure of chief finance officer Simon Scott.