BP and Shell Gain After Russian Ballistic Missile Strikes

Bitcoin surged towards $100,000 on optimism about friendlier US regulations under the incoming administration, energising crypto markets. Meanwhile, European markets are set to focus on manufacturing PMIs, with the euro languishing at a 13-month low amid concerns about global economic strength.

Equities

The FTSE 100 rose 0.8% on Thursday, reaching its highest level since 8 November, as a weaker pound boosted dollar-earning companies like AstraZeneca, Shell, and BP. AstraZeneca gained on the back of favourable currency moves, while BP and Shell also rose as oil prices strengthened.

Shares of Halma climbed 5.7% after the safety equipment manufacturer reported growth in half-year revenue and profit. Conversely, JD Sports Fashion plunged 15.5% following a profit warning tied to weak October trading, unseasonably warm weather, and cautious consumer spending. CMC Markets also saw a sharp decline, falling 14.7%, after reiterating its operating income forecast for the year, disappointing those hoping for an upgrade.

In the US, the Dow Jones Industrial Average gained 1.06%, and the S&P 500 rose 0.53%, both reaching one-week highs, while the Nasdaq inched up 0.03%. Dow gains were supported by Salesforce, which climbed 3.1% as multiple brokerages raised their price targets following strong results. Nvidia added 0.5% as investors digested its earnings report, which showed robust demand for AI chips despite the company forecasting its slowest revenue growth in seven quarters. Deere surged 8% after the machinery manufacturer posted stronger-than-expected quarterly profits.

However, Alphabet fell 4.7% to a four-week low after the US Justice Department argued that Google must sell its Chrome browser to curb its search monopoly. Amazon dropped 2.2% following news of a potential EU investigation into whether it favours its own products on its marketplace. Meanwhile, Snowflake jumped 32.7% after raising its annual product revenue forecast, energising the broader tech sector.

Investors also focused on sector-specific movements. The semiconductor index rose 1.6%, led by Nvidia’s outlook, while the energy sector climbed 0.8% as oil prices rose amidst continued geopolitical tensions. Market breadth was solid, with advancing stocks outnumbering decliners across major exchanges, bolstered by strength in industrials and utilities.

Forex & Commodities

The US dollar rose to a 13-month high, with the dollar index climbing 0.39% to 107.03, as initial jobless claims fell to 213,000, well below expectations. The euro weakened 0.64% to $1.0476, reaching its lowest level in 13 months. Meanwhile, the Japanese yen strengthened briefly, with the dollar falling as much as 0.98% to 154.56 before recovering slightly. Comments from Federal Reserve officials signalled a potentially slower pace of rate cuts, while markets now price in a reduced 55.9% likelihood of a 25-basis-point rate cut in December.

Gold prices increased 0.7% to $2,687.87 per ounce, heading for their best week in over a year, supported by escalating tensions in Ukraine. Russia’s ballistic missile strike on Ukraine and concerns over a broader conflict boosted safe-haven demand. Spot silver rose 0.3% to $30.88 per ounce, with platinum and palladium also posting weekly gains.

Oil prices were on track for a weekly rise of over 4%. Brent crude futures edged up 0.2% to $74.40 per barrel, and US West Texas Intermediate rose 0.3% to $70.30.

The intensification of the Ukraine war, with Russian President Vladimir Putin warning of a global conflict, supported oil prices. However, rising US crude inventories and concerns about surplus supply next year limited further gains.