Global markets climb on rising US confidence and higher oil prices – as it happened

Katie Allen and Julia Kollewe (now)

from on 2015-12-29 17:25 (#Z1T7)

Investors snap up riskier assets such as stocks and emerging market currencies on the back of the rally in oil prices

5.24pm GMT

With this, we are closing up for the day. Thank you for all your comments. We'll be back tomorrow. Good night.

4.50pm GMT

European stock markets have closed. The recovery in oil prices (Brent crude is up nearly 3% on the day at around $37.70 a barrel) after Monday's sell-off - traders have pointed to the arrival of colder weather in Europe and north America - has benefited shares around the world:

4.17pm GMT

On Monday, the rouble hit its lowest level this year, pressured by sliding oil prices. The Russian economy is heavily reliant on crude and natural gas, which together account for almost half of state revenue.

But today, the Russian currency has recovered, boosted by higher oil prices and a Bloomberg report that former Russian finance minister and investor favourite Alexei Kudrin is in talks with Vladimir Putin about returning to a senior post to help deal with the country's worsening economic troubles.

Wow.. Ruble erases all losses versus US dollar on @Aleksei_Kudrin's possible comeback pic.twitter.com/mF5ATaJKlL

4.10pm GMT

Let's take a look at currency markets. The US dollar is up against the euro and other major currencies, but has slipped against the Russian rouble, which has been been lifted by higher oil prices. Brent crude is nearly 3% higher on the day.

Investors are snapping up riskier assets, including stocks and emerging market currencies, on the back of the rally in oil prices. This has hurt the euro, which is regarded as a safer currency, given its low yield.

3.55pm GMT

Away from the markets, here's some good news for UK consumers. Companies that plague householders with nuisance phone calls and texts face fines totalling more than 1m this year and next, a government watchdog has warned after tripling the financial punishment for rogue callers in 2015, our consumer affairs correspondent Rebecca Smithers writes.

The information commissioner's office received about 170,000 complaints in 2015 from people who had received nuisance calls and texts - a slight decline on last year, when the total was 175,330.

3.51pm GMT

Gold has benefited from the rally in oil prices, but gains were limited by a stronger dollar. Spot gold edged up 0.1% to $1,070.05 an ounce in thin trading.

The precious metal is still on course for its third year of losses, pressured by the prospect for more rate hikes in the US. It is likely to end the year nearly 10% lower from the previous year, mainly due to expectations that higher US interest rates will hit demand for gold.

Gold's down trend is likely to continue throughout 2016.... there are going to be more US rate hikes than the market is anticipating the next year."

3.41pm GMT

Here is Connor Campbell again, financial analyst at Spreadex:

A slightly better than expected goods trade deficit (at $60.5bn against the $60.9bn anticipated, but still greater than last month's $58.4bn) and a much better than forecast CB consumer confidence figure helped the Dow Jones open at, and maintain, a 170 point jump this Tuesday. That leaves the US index at a 12 day high, and with a slim chance of edging into the green in terms of year-long growth before the end of trading on Thursday.

The FTSE likely would have been higher if wasn't for the gains made by its housing sector being effectively negated by the Scrooge-like commodity stocks and a renewed slide from the supermarket sector. News that the sale of its pharmacy business to Celesio would be undergoing an in-depth investigation, as ordered by the CMA, caused a specific headache for Sainsbury's [down 1.2%].

More generally, news that Amazon intends to substantially expand its grocery delivery service Pantry in the New Year caused the likes of Tesco and Morrisons to tumble, with the online-only Ocado Group [plunging more than 4%] especially spooked by the announcement."

3.22pm GMT

Adam Button, currency analyst at Forex Live, says about the rise in US consumer confidence:

It's strong but still well below where it was in September. The revision to the November reading meant it was the worst since July, not the worst since Sept 2014."

3.12pm GMT

Stocks on Wall Street are extending gains on the better-than-expected US confidence numbers, with the Nasdaq and the Dow Jones up around 1% and the S&P 500 0.8% ahead.

3.08pm GMT

Lynn Franco, director of economic indicators at the Conference Board, said:

Consumer confidence improved in December, following a moderate decrease in November. As 2015 draws to a close, consumers' assessment of the current state of the economy remains positive, particularly their assessment of the job market.

Looking ahead to 2016, consumers are expecting little change in both business conditions and the labor market. Expectations regarding their financial outlook are mixed, but the optimists continue to outweigh the pessimists."

3.05pm GMT

The latest US consumer confidence numbers are out. The Conference Board consumer confidence index improved to 96.5 in December, from a revised 92.6 in November, beating expectations of a reading of 93.5.

3.00pm GMT

Staying on the other side of the Atlantic for the moment, the US regulator FINRA has settled with Barclays Capital over mutual funds. The Financial Industry Regulatory Authority has ordered Barclays Capital to pay $13.75m for unsuitable mutual fund transactions and related supervisory failures.

The British bank's investment banking arm will have to pay more than $10m in compensation, including interest, to affected customers, and has been fined a further $3.75m by the regulator. It said in a statement:

FINRA found that from January 2010 through June 2015, Barclays' supervisory systems were not sufficient to prevent unsuitable switching or to meet certain of the firm's obligations regarding the sale of mutual funds to retail brokerage customers".

In concluding this settlement, Barclays neither admitted nor denied the charges, but consented to the entry of FINRA's findings."

2.40pm GMT

Shortly after the opening bell on Wall Street, shares are higher, mirroring a rally in oil prices.

The tech-heavy Nasdaq index is up 0.7%, the Dow Jones industrial average is up 0.9% and the S&P 500 has added 0.8%.

Dow adds 100 in open; energy leading S&P higher https://t.co/DvOQnfZo0W pic.twitter.com/Dm314FFS32

2.29pm GMT

Figures just out in the US suggest home prices there rose at a slightly faster pace in October compared with September and a touch above economists' forecasts.

"Generally good economic conditions continue to support gains in home prices.

"Among the positive factors are consumers' expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts."

"The recent action by the Federal Reserve raising the Fed funds target rate by 25 basis points and spreading expectations of further increases during 2016 are leading some to wonder if mortgage interest rate might rise. Typically, increases in short term interest rates lead to smaller increases in long term interest rates ... From May 2004 to July 2007, the Fed funds rate moved up from 1.0% to 5.25%; over the same period, the mortgage rate rose from about 6% to 6.75% during a sustained tightening effort by the Federal Reserve. The latest economic projections published by the Fed following the recent rate increase suggest that the Fed funds rate will be around 2.6% in September 2017 compared to a current rate of about 0.5%. These data suggest that potential home buyers need not fear runaway mortgage interest rates."

1.50pm GMT

The Competition and Markets Authority (CMA) in the UK has confirmed it is referring the sale of Sainsbury's pharmacy business for an in-depth investigation.

The CMA's initial investigation identified 78 local areas where customers may be affected by a loss of competition between Lloyds Pharmacy (a Celesio subsidiary) and Sainsbury's pharmacies. The CMA also indicated that in other local areas it had been unable to reach a positive conclusion on whether the merger gives rise to a realistic prospect of a substantial lessening of competition.

Celesio has not offered any undertakings in lieu and the CMA will therefore now refer the merger.

1.23pm GMT

More pressure on Britain's big supermarkets

12.56pm GMT

On Wall Street the US futures market is pointing to a higher open, helped by a modest rise in oil prices, traders say.

In the UK, the FTSE 100 is up 0.4%, or 24 points, at 6278. Housebuilders are among the biggest risers while the miners again feature among the biggest fallers as aluminium and copper prices head lower.

"Whilst thin(ish) trading volumes appear to be enhancing whatever nascent positive sentiment there is in the eurozone, allowing the DAX and CAC to stretch out their legs to hit fresh 20-day highs, the FTSE hasn't been so lucky this Tuesday morning.

"Despite a strong set of housing stocks (Persimmon and Berkeley Group leading the charge), lifted by both news of record high UK prices and the potential windfall from the cost of rebuilding and repairing the numerous homes damaged in the northern floods, and a stable oil price, the UK index is struggling to match its Eurozone peers, hampered by a still grumpy mining sector. There are no real signs that the latter issue could turn around this afternoon... As ever those same commodity stocks that have plagued the FTSE throughout 2015 are trying to ensure it ends the year not with a bang but a whimper."

12.20pm GMT

The plunge in oil prices this year has taken its toll on Saudi Arabia's state coffers and today the fallout is being fell in its stock market.

11.41am GMT

As #BankUnderground closes for the festive season, try our Christmas Quiz! https://t.co/oJAEiXi1wx

Quiz of the Year: How well do you remember 2015? https://t.co/W4rhDJSJZS pic.twitter.com/94pnYFrVJa

Business quiz of the year https://t.co/SFG9lKS8SH

11.09am GMT

New floods threaten the UK with Storm Frank on the way and as we reported earlier, estimates of the costs so far are already in the billions.

For live coverage of the flooding and its fallout, you can follow our blog here:

"In purely economic/GDP costs, the net overall impact of the floods will be limited. There will be some near-term hit to the economy (but even this will be relatively limited given the overall size of the economy) but this will be offset by some gains further out). But this will not tell the whole story by a long way - especially for the poor individual people and businesses that are affected.

"Looking at the extent of the flooding, it could well shave 0.2-0.25 percentage point off GDP growth in the near term. As the flooding is occurring late on in the fourth quarter, some of this negative impact is likely to occur in the first quarter of 2016.

Flooding impact has to be incoporated into UK GDP forecasts but this belittles real impact in terms of the suffering/stress of the affected

10.49am GMT

"UK house prices rose 13.4% annually and 3.7% on the month to break records again in November. This is the steepest monthly and annual increase on record and follows a surge in registrations from buy-to-let investors since the Autumn Statement in anticipation of the 3% stamp duty surcharge which is effective from the 1st of April 2016. This could mean the stamp duty payable on a property worth 275,000 could rise from 3,750 to 12,000.

"Although first-time buyer house prices have remained relatively stable, up just 1.1% in the last month, I expect these to shoot up over the coming months as first-time buyers face fierce competition from buy-to-let investors. The pressure is already being felt by many with demand among first-time-buyers already down 7% in the last month alone. While first-time buyers may face a tough couple of months, once the stamp duty changes come into effect in April, demand from buy-to-let investors is likely to recede so we should see a recovery in prices at this level."

10.16am GMT

Deutsche Bank shares are up this morning after news it is selling its 20% stake in Beijing's Hua Xia Bank, making it the latest Western business to pare back its links to China.

As Reuters reports, Deutsche is selling the stake to Chinese insurer PICC Property and Casualty Co in a deal worth up to $4bn (2.69bn).

9.48am GMT

As Britain's big banks carry on with long task of patching up their reputations, they have new report cards to pore over from the body set up to improve standards in the wake of the Libor-rigging crisis.

9.14am GMT

It looks like it was a very merry Christmas for Fitbit, the US-listed maker of wearable health monitors. Reports that its app topped download charts on 25 December suggest plenty of people were unwrapping new gadgets from the firm on Christmas day and that helped lift its shares on Monday. They closed up 3.3%.

8.43am GMT

After its little Christmas break the FTSE 100 has re-opened this morning and struggling to find some direction. The bluechip index of London-listed shares is up around 8 points, that's just 0.1%, at 6263.

8.06am GMT

Good morning and welcome back to our live blog covering financial markets and business and economics news from around the UK and the world.

As the north of England and Scotland brace for the arrival of yet another storm later, towns, households and businesses are counting the cost of the flood damage so far.

MIRROR: Dam you, Cam #tomorrowspaperstoday #bbcpapers pic.twitter.com/h5XkjCveyA

THE I PAPER: Flood victims facing ruin turn on the PM #tomorrowspaperstoday #bbcpapers pic.twitter.com/vAFZhLr5s1

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