The London stock markets are off to a sluggish start after the Christmas shutdown, with the blue-chip FTSE 100 index rising 0.6pc in early trading despite continued pain for commodity stocks.
The FTSE 100 index has so far added 39 points to its Christmas Eve close, reaching 6,293 by 9.30am. London traders appear to be taking their cues from an upbeat end to the day in Asia, where the main indices in Shanghai and Tokyo reversed early losses to close higher.
The price of Brent crude oil has stabilised around the $36.60 mark, albeit on thin trading volumes, following a 3pc tumble on Monday and 11-year lows ahead of Christmas. Low expectations for oil prices were reinforced by reports that Saudi Arabia, a major global exporter of oil, is preparing to cut its public budget to counteract a prolonged slump.
The London indices, which count oil and gas producers among their biggest constituents, are particularly sensitive to the 70pc crash in the price of crude since summer 2014.
Oil and gas firms made up more than 12pc of the FTSE 100 by market capitalisation at the end of November, and more than 10pc of the broader FTSE All-Share.
The oil giant BP was among the biggest fallers on Tuesday, opening almost 2pc lower at 358.9p. Antofagasta and Anglo American, the mining firms that have suffered from the widespread decline in commodity prices, also fell sharply, down 1.6pc and 5.7pc respectively.
Also on the downward slopes was the insurance company RSA, as the north of England braces for more heavy rain that has already caused billions of pounds-worth of property damage. Household insurance made up about a quarter of RSA’s global sales last year, and its shares were down 1.4pc to 424.7p in morning trading.
Rival insurer Aviva fell a more modest 0.2pc to 518p, while car and home specialist Direct Line managed to rise 0.2pc to 411p.
KPMG has estimated that the economic impact of the devastating floods this winter could reach almost £6bn.
The biggest riser in the FTSE 100 was Hikma Pharmaceuticals, soaring almost 3.5pc to £23.29, taking its total gains since mid-December to 13.6pc.
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