FTSE CLOSE: London stocks gain 3% as US cheers bank boss Jamie Dimon for dropping $26m on JPMorgan shares

17.40: The FTSE 100 closed up 3 per cent or 170.63 points at 5707.60, as an 8 per cent leap in the price of Brent crude bolstered oil stocks and sparked a rally from Thursday's three-and-a-half-year low.

The oil price was up close to $2.5 dollars to $32.5 a barrel, a move triggered by mounting speculation that members of the OPEC oil cartel were ready to negotiate over possible production cuts.

BP was up 7 per cent or 22.5p to 332.5p, Royal Dutch Shell up 80.5p to 1526p and oil and gas explorer BG Group rose 42p to 1062p.

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Only in America: Jamie Dimon has shown American-style bravado for buying JPMorgan shares, but analysts say British bank chief executives have not been in their jobs long enough to afford to do something similar

The cheer from the oil price also spread to mining stocks, with Anglo American surging 18 per cent or 58p to 373.9p.

A rebound for banking stocks - which plunged into red in three sessions this week - drove the recovery across European markets, with Germany's Dax and the Cac 40 in France both up more than 2 per cent.

The resurgence was led by Germany's Commerzbank, which has announced its first dividend since 2007, helping its shares rise more than 16 per cent.

Deutsche Bank's stocks also leapt more than 11 per cent after the German lender said it would buy back more than $5billion (£3.8billion) worth of its own bonds.

UK banking stocks also made gains after a tumultuous week in the markets where investors lost confidence in heavyweight financial institutions fearing their vulnerability to a slowdown in global growth.

Standard Chartered climbed 10.9 per cent or 42.3p to 429p, Barclays was up 9.3p to 157.2p and Lloyds Banking Group moved up 2.4p to 58.4p.

Jasper Lawler of CMC Markets said: 'European markets rebounded on the last day of what has been a tumultuous week for markets. Most of the underlying issues remain unresolved but the dramatic re-pricing of risk that took place through Thursday could only be sustained for so long without a let-up.

'The most beaten up sectors of energy, basic resources and financials led the recovery as oil prices came off their lows and European banks received some more positive news.

'Well-received results from Germany’s Commerzbank, Deutsche Bank doing a buyback of its own bonds and JP Morgan chief Jamie Dimon buying $26million worth of his own company’s stock were enough to restore some confidence in battered bank shares.

'The catalyst for the move higher in the energy sector has been a jump in the price of oil overnight when rumours surfaced that OPEC was ready to discuss a production cut.'

Engine-maker Rolls-Royce saw shares surge more than 14% or 76p to 606p, as its fall in profits was better than analysts had expected.

It also confirmed it would cut its dividend by half to 7.1p a share, as it bids to conserve cash.

Fashion chain Superdry saw its stock value come under pressure after its founder announced he had sold just under £50million of shares to fund his divorce.

Julian Dunkerton completed the sale of four million shares on Thursday night at around £12 each to raise £48million, Superdry owner SuperGroup confirmed. Shares fell 20p to 1309p.

The pound was up against the euro at €1.28, as economic data in Germany suggested it was edging towards its first quarterly slowdown in annual growth since the second quarter of 2014. The pound was marginally down against the dollar at $1.44

The biggest risers in the FTSE 100 were Anglo American up 58p to 373.9p, Rolls-Royce up 76p to 606p, Glencore up 10.7p to 98.4p and Antofagasta up 43p to 433.3p.

The biggest fallers in the FTSE 100 were Tesco down 2.6p to 177p, Hikma Pharmaceuticals down 25p to 1850p, Imperial Brands down 34p to 3553.5p and BT Group down 2.2p to 448.2p

17.01: The FTSE 100 closed up 170.63 points at 5707.60. More to come. 

15.20: The Footsie extended its gains after stocks on Wall Street pushed higher at the opening bell, driven by a rebound in energy and banking stocks.   

A uptick in the oil price has been enough to push oil and commodity stocks higher, while in the US JP Morgan boss Jamie Dimon helped to push his own bank's stock higher after he snapped up 500,000 shares at a cost of $26million.

Financial analysts praised the American's bravado and for putting his money where his mouth is, while also calling for other top bosses to follow suit. 

Connor Campbell, at Spreadex, said: 'It will be interesting to see if anyone follows suit. But just Dimon doing it, however, might be enough to reassure the sector as a whole. It's a move that is far more bold than Deutsche Bank's John Ryan calling the company 'rock solid'.  

Bank chief executives have been forced to come out fighting this week following the mass financial sector sell off this week and RBS bank Ross McEwan tried to do his bit to defend the industry this morning.

He said of the current market turmoil: 'We are holding our nerve while others panic... UK banks in much better shape these days.' 

Meanwhile Deutsche Bank also managed to calm its investors nerves after it announced that it is to buy back more than $5billion (£3.5billion) of its own debt.

Leader of the pack: Jamie Dimon snapped up JP Morgan shares on the cheap, will Lloyd Blankfein at Goldman Sachs do the same this session?

Leader of the pack: Jamie Dimon snapped up JP Morgan shares on the cheap, will Lloyd Blankfein at Goldman Sachs do the same this session?

JP Morgan shares are up 4 per cent, Deutsche Bank shares 8 per cent and RBS stock has been ticking steadily along all session, gaining 5 per cent, or 11.4p, at 234.9p. 

Meanwhile the wider FTSE 100 has been clocking up a 2 per cent gain, or 104.9 points, at 5,641.1, while in the US the Dow Jones industrial average pushed 118.68 points higher, or 0.76 per cent, at 15,778.86.

Aside from Dimon and oil there has also been some fairly solid economic data out today.

US consumer spending regained momentum last January as households ramped up purchases of a variety of goods.

In total retail sales lifted $449.9billion in January, up 3.4 percent from a year ago.

The January and December growth numbers suggest consumer spending may not be as weak as thought, especially given the lack of inflation.

Meanwhile in Europe data from Eurostat showed that, year on year, the gross domestic product for the Eurozone grew at 1.5 per cent in the fourth quarter.

The question now is will this positivity carry on into early next week, or have investors witnessed another minor rally before a further crash.

Craig Erlam, Oanda, said: 'While the gains are welcome, I’m not convinced at this stage that this is anything more than a dead cat bounce. 

'The gains in oil are being driven by comments from UAE energy minister who claimed that OPEC are willing to discuss production cuts with other oil exporters, which could in theory drive a more sustainable rise in prices.' 

'The problem is this is not the first time we’ve had these kinds of reports and nothing has since materialised. We get a short-term boost followed by a return to lower prices. I don’t expect this time to be any different.' 

Leaderboard: Rolls Royce is heading into the weekend as the top stock, despite cutting its dividend today

Leaderboard: Rolls Royce is heading into the weekend as the top stock, despite cutting its dividend today

12:00: The Footsie extended its gains at lunchtime, continuing a rally from yesterday's sharp falls thanks to a bounce by banking and energy shares as oil prices recovered on Opec production cut hopes, with US stocks also seen opening higher after recent declines.

By mid session, the FTSE 100 index was up 101.2 points, or 1.8 per cent at 5,638,2 having closed 135.33 points lower yesterday after a dismal week.

The UK benchmark is still on course for a weekly loss of around 6 per cent, taking the falls so far for February to around 7.5 per cent – which would be its biggest monthly loss since February 2009 - and its losses for the year to date to more than 10 per cent.

Recovery: US stock futures also pointed to a rebound today on Wall Street following falls yesterday, although with US markets closed on Monday for the President’s Day holiday some caution could also set in late

Recovery: US stock futures also pointed to a rebound today on Wall Street following falls yesterday, although with US markets closed on Monday for the President's Day holiday some caution could also set in late

In Europe, Germany's Dax 30 index was 1.6 per cent higher, while the CAC 40 index in France added 1.3 per cent, both also rebounding after sharp losses yesterday helped by in-line eurozone fourth quarter growth data, although industrial output in the region was lower than forecast.

US stock futures also pointed to a rebound today on Wall Street following falls yesterday, although with US markets closed on Monday for the President's Day holiday some caution could also set in later, especially as Chinese markets will then return after a week-long New Year break.

Connor Campbell, Financial Analyst at Spreadex, said: 'If all goes to plan the US markets should be joining Europe with a good (but arguably not good enough) display this afternoon, the Dow Jones looking at a 100 point-plus rise at the open.

'There is plenty of data for US investors to deal with first, however; retail sales are expected to jump from -0.1 per cent to 0.1 per cent month on month, whilst import prices are anticipated to drop to a 5 month low of -1.4 per cent.

He added: 'After the bell, meanwhile, the preliminary UoM consumer sentiment figure is forecast to improve on last month's now-downgraded (from 93.3) 92.0.'

UK data today showed construction output slipped more than expected in the fourth quarter, dragged down by reduced infrastructure spending despite housebuilding increasing at the fastest pace since the start of 2014.

Construction output fell 0.4 per cent in the fourth quarter after a 1.7 per cent decline in the previous three months, the Office for National Statistics said. However, construction output rose 1.5 per cent in December alone, in line with economists' forecasts after a 1.1 per cent drop in November.

On currency markets, sterling took heart from the December number, rallying after falling yesterday to 13 months versus the euro, up 0.9 per cent at €1.2885, and gaining 0.4 per cent versus the dollar at $1.4533.

Among equities, commodity stocks led the recovery in London after oil prices jumped around 4 per cent higher after comments by the energy minister of Opec-member United Arab Emirates sparked hopes of a coordinated production cut, although analysts said such a move remained unlikely and that oversupply would persist.

Brent crude was trading above $31 a barrel today after dropping to a 12-year low yesterday after the United Arab Emirates energy minister Suhail bin Mohammed al-Mazrouei said the cartel was willing to talk with other exporters about cutting output.

Energy blue chip Royal Dutch Shell rose 3 per cent, or 43.5p at 1,489.0p, while BP gained 4.67 per cent, or 14.6p at 324.8p. Among miners, Anglo American jumped 14.5 per cent, or 45.9p to 361.9p, and Glencore rose 9 per cent, or 8.2p to 95.9p.

Banks were also back in favour amid signs that investors were feeling more positive about the strength of the lenders in the face of a slowdown in global growth.

Germany's Commerzbank provided a positive focus, jumping 12 per cent higher after it returned to profit in the fourth quarter as provisions for bad loans fell, allowing it to draw a line under a six-year restructuring by announcing to close its 'bad bank' comprising non-core assets.

In London, Barclays gained 4.5 per cent or 6.6p to 154.5p, while Standard Chartered added 7 per cent or 28.1p higher to 414.8p helped by an upgrade in rating by Investec to buy from hold.

On the corporate news front, blue chip engine maker Rolls-Royce saw its shares leap 16.5 per cent or 87.5p higher to 617.5p, topping the FTSE 100 leader board as its 2015 profit fall was better than analysts had expected.

Rolls-Royce's annual profits tumbled 12 per cent to £1.4billion as the business was hit by civil aerospace cuts and falling commodity prices that have impacted output at its marine division, which supplies the oil industry.

The group also confirmed it would cut its dividend by half to 7.1p a share, as it bids to conserve cash, its first dividend cut in 24 years.

10.30: The Footsie held its recovery as the morning session progressed, bouncing back after yesterday's slump thanks to a rally in hard-pressed energy and banking shares as oil prices recovered on production cut hopes helping to ease fears over the global growth outlook.

By mid morning, the FTSE 100 index was 87.3 points, or 1.6 per cent higher at 5,624.3 having closed 135.33 points lower yesterday.

However, the UK benchmark is still on course for a weekly loss of around 6 per cent, taking the falls so far for February to around 7.5 per cent – which would be its biggest monthly loss since February 2009 - and its losses for the year to date to more than 10 per cent.

Dismal performance: The FTSE 100 index rallied today but is still on course for a weekly loss of around 6 per cent, taking  its losses for the year to date to more than 10 per cent

Dismal performance: The FTSE 100 index rallied today but is still on course for a weekly loss of around 6 per cent, taking its losses for the year to date to more than 10 per cent

Mike McCudden, Head of Derivatives at stockbroker Interactive Investor, said: 'As another nerve shredding week draws to a close there appears to be some mild relief for investors as equities try to drive higher.

'However, it may take some time before investors are truly convinced that a move back in to riskier assets is worthwhile, as the market turmoil emanating from Asia and the euro zone shows no sign of going away any time soon.'

US stocks slumped again overnight, with the Dow Jones Industrial Average dropping over 250 points unsettled by testimony this week from Federal Reserve boss Janet Yellen which highlighted worries about the impact of the global financial turmoil on the economy but kept alive expectations for further US rate hikes.

Asian shares fell for a sixth straight session today amid concerns about the impact of slowdowns in China and other emerging markets on the global growth outlook.

But in Europe, Germany's Dax 30 index was 1.4 per cent higher, while the CAC 40 index in France added 1.3 per cent, both also rebounding after sharp losses yesterday helped by in-line eurozone fourth quarter growth data.

Eurostat said today that gross domestic product in the region rose 0.3 per cent quarter-on-quarter in the last three months of last year, the same as in the July-September period and as expected by economists. Year-on-year, the euro zone economy expanded 1.5 per cent, also as forecast.

Separate data, however, showed eurozone industrial output fell 1 per cent month-on-month in December, giving a 1.3 per cent year-on-year fall, both bigger than forecast.

Meanwhile, UK official data today showed construction output slipped more than expected in the fourth quarter, dragged down by reduced infrastructure spending despite housebuilding increasing at the fastest pace since the start of 2014.

Construction output fell 0.4 per cent in the fourth quarter after a 1.7 per cent decline in the previous three months, the Office for National Statistics said.

However, construction output rose 1.5 per cent in December alone, in line with economists' forecasts after a 1.1 per cent drop in November.

And the ONS said that while the quarterly fall was bigger than the estimate used in its preliminary fourth quarter UK GDP figures, even when combined with the downward revision to industrial output figures earlier this week, there would only be a negligible impact on overall growth rates.

For 2015 as a whole, construction output grew by 3.4 per cent - faster than the economy as a whole, but slower than the 7.5 per cent expansion chalked up in 2014.

Still, on currency markets, sterling took heart from the December rebound, rallying after falling yesterday to 13 months versus the euro, up 0.7 per cent at €1.2871, and gaining 0.4 per cent versus the dollar at $1.4535.

Among equities, commodity stocks led the blue chip recovery in London after oil prices jumped around 5 per cent higher after comments by the energy minister of Opec-member United Arab Emirates sparked hopes of a coordinated production cut, yet analysts said such a move remained unlikely and that oversupply would persist.

Brent crude was back trading above $31.60 a barrel today after the United Arab Emirates energy minister Suhail bin Mohammed al-Mazrouei said the cartel was willing to talk with other exporters about cutting output.

With energy blue chips, Royal Dutch Shell saw its shares add 2.7 per cent, or 39.0p at 1,484.5p, while BP gained 3.9 per cent, or 12.1p at 322.3p. Among miners, Anglo American jumped 10.6 per cent, or 33.7p higher to 349.6p, and Glencore rose 7 per cent, or 6.4p to 94.0p.

Banks were also back in favour amid signs that investors were feeling more positive about the strength of the lenders in the face of a slowdown in global growth.

Germany's Commerzbank provided a positive focus, jumping 12 per cent higher after it returned to profit in the fourth quarter as provisions for bad loans fell, allowing it to draw a line under a six-year restructuring by announcing to close its 'bad bank' comprising non-core assets.

In London, Barclays gained 4.6 per cent or 6.8p to 154.7p, while Standard Chartered leapt 7 per cent or 27.2p higher to 419.3p helped by an upgrade in rating by Investec to buy from hold.

Shares in Investec itself were also in demand, adding 4.6 per cent, or 18.5p at 421.2p as HSBC upgraded its stance on the Anglo-South African bank and asset manager to buy from hold.

On the corporate news front, blue chip engine maker Rolls-Royce saw its shares surge 13 per cent or 69.5p higher to 599.5p, topping the FTSE 100 leader board as its 2015 profit fall was better than analysts had expected.

Rolls-Royce's annual profits tumbled 12 per cent to £1.4billion as the business was hit by civil aerospace cuts and falling commodity prices that have impacted output at its marine division, which supplies the oil industry.

The group also confirmed it would cut its dividend by half to 7.1p a share, as it bids to conserve cash, its first dividend cut in 24 years.

The firm is in the throes of a massive restructuring following the appointment of new man Warren East as chief executive last year in an attempt to arrest a decline that had seen the FTSE 100 group issue a swathe of profit warnings.

On the second line, fashion firm Supergroup was the biggest FTSE 250 faller, down 6.5 per cent, or 87p to 1,242p after its founder and Product & Brand Director Julian Dunkerton sold 4.0 million shares in the company at 1,200p each yesterday.

Following the sale, Dunkerton holds 22.1 million shares in Supergroup, equivalent to a 27 per cent stake in the company. 

08.15: The Footsie bounced higher in opening deals, rallying after yesterday's slump thanks to a rally in oil prices on production cut hopes, shrugging aside further sharp falls overnight by US and Asian stocks in the face of continuing fears over the global growth outlook.

In opening deals, the FTSE 100 index was up 85.1 points, or 1.5 per cent at 5,622.0 having dropped 135.33 points yesterday after a tumble by banking shares on worries over the impact of the global market turmoil and renewed falls by commodity stocks on weaker oil prices.

The UK benchmark is still on course for a weekly loss of around 6 per cent, taking its losses for the year to dates to around 9 per cent.

Bounce higher: Brent crude was back trading at just above $31 a barrel today after the United Arab Emirates energy minister said the Opec cartel was willing to talk with other exporters about cutting output

Bounce higher: Brent crude was back trading at just above $31 a barrel today after the United Arab Emirates energy minister said the Opec cartel was willing to talk with other exporters about cutting output

However, commodity stocks led the recovery today after oil prices jumped almost 5 per cent higher after comments by the energy minister of OPEC-member United Arab Emirates sparked hopes of a coordinated production cut, yet analysts said such a move remained unlikely and that oversupply would persist.

Brent crude was back trading at just above $31 a barrel today after the United Arab Emirates energy minister Suhail bin Mohammed al-Mazrouei said the cartel was willing to talk with other exporters about cutting output.

Overnight US stocks slumped again, with the Dow Jones Industrial Average dropping over 250 points unsettled by testimony this week from Federal Reserve boss Janet Yellen which highlighted worries about the impact of the global financial turmoil on the economy but kept alive expectations for further US rate hikes.

Asian shares fell for a sixth straight session today as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.

Trading resumed in Japan after a public holiday in similar fashion to the way it had left off, with the Nikkei 225 index tumbling another 5 per cent, posting a weekly loss of 11.1 per cent, its biggest since October 2008, as a sudden spike in the yen this week took most investors by surprise.

Jasper Lawler. Market Analyst at CMC Markets UK, said: 'It's probably fair to say markets are in a spot of bother right now. This has been seen overnight again with another tumble in Japanese shares further into bear market territory.

'The immediate theme for stock markets has been distress in the financial sector and a sharp decline in bank stocks. But there is a much more disconcerting wider theme of lost faith in central banks that threatens a more protracted period risk aversion.'

He added: 'If there is some relief, it may not last long. On Monday next week, Chinese markets will have some catching up to do when returning from Lunar New Year celebrations, while US markets are closed for Presidents Day.'

The main focus today will be on the flash reading for fourth quarter GDP in the Eurozone, with growth expected to have edged back up to 0.4 per cent quarter-on-quarter, giving overall growth of 1.5 per cent for 2015, which would be up from 0.9 per cent in the previous year and the best performance since 2011.

The only UK data scheduled for release today is the latest construction output numbers from the Office for National Statistics, which could disappoint given a weak Markit purchasing managers index for the sector earlier this month.

On the corporate front, blue chip engine maker Rolls-Royce saw a 13 per cent relief bounce in its shares as the group posted in-line full year results, which included its first dividend cut in 24 years.

The firm is in the throes of a massive restructuring following the appointment of new man Warren East as chief executive last year in an attempt to arrest a decline that has seen the FTSE 100 group issue a swathe of profit warnings.

Stocks in focus in London include:

ROLLS-ROYCE – The blue chip engine maker has halved its dividend to shore up its finances after a slowdown in demand for some of its engines caused full-year profit to fall 16 per cent.

GLAXOSMITHKLINE - Britain's competition body said it had fined the drugmaker £37.6million for market abuse in striking deals to delay the launch of generic copies of its antidepressant Seroxat.

BAE SYSTEMS - Kuwait will sign a deal next week to buy Eurofighter jets, the Gulf state's news agency KUNA said on yesterday, citing the country's defence minister. Kuwait signed a memorandum of understanding in September to buy 28 Eurofighter jets, the consortium that makes the aircraft said, in a deal worth up to €8billion ($9billion). BAE Systems is one of the partners of the consortium.

RIO TINTO – The global miner will seek financing for its massive Simandou iron ore project in Guinea, despite writing down its value due to low commodity prices and funding uncertainties.

MONITISE – The mobile banking technology company said it took a non-cash impairment charge of £166.8million ($241.6million) in the first half for its non-cloud intangible assets.

UK company news scheduled today includes:

Finals: Rolls-Royce, Holders Technology

Interims: Monitise

Trading updates: Acal, S&U

Economic news scheduled today includes:

UK construction activity at 9.30am

eurozone flash Q4 GDP estimate at 10am

eurozone industrial production at 10am

US retail sales at 1.30pm

UMich preliminary consumer sentiment index at 3.00pm

 

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