The FTSE 100 ticked higher on Monday as upbeat UK housing data helped lift the banking sector, while Shell and BP rallied amid rising oil prices and corporate developments from both.
London’s leading index was trading 0.4% higher at the time of writing.
NatWest was top of the pile, gaining 2.3%, after Halifax said UK house prices were up 4.7% over the past year – the fastest pace of growth since 2022.
“In the UK, house prices grew at their strongest rate since November 2022, according to Halifax’s latest survey. The year-on-year price growth of 4.7% suggests the Bank of England’s interest rate cut in August has breathed new life into the property market, helped by falling mortgage rates making the dream of getting on the housing ladder a reality for more people,” said Russ Mould, investment director at AJ Bell.
“A pick-up in housing market activity should drive more business to mortgage lenders, hence why the likes of NatWest and Lloyds were among the top risers on the FTSE 100.”
BP and Shell were the biggest contributors to the FTSE 100 in terms of the number of points added to the index.
BP rose 2% on reports it was planning to slow the pace of its transition to clean energy and ensure shareholders with see the benefits of its fossil fuels business well past 2030.
“Reports suggest BP chief executive Murray Auchincloss is planning to water down the company’s commitment to sustainability goals,” Russ Mould explained.
“BP may feel it is being punished by the market for a strategy which included a 25% cut to oil and gas output by 2030 – already down from the original 40% reduction outlined in 2020 – so it appears this plan will now be ripped up completely.
“The problem with reducing hydrocarbon production is it generates most of the cash which allows BP to reward shareholders with dividends and share buybacks. There is speculation that BP will not only scrap the output reduction plan, but it will also seek to increase the volume of oil and gas it produces by investing in geographies like the Middle East and Gulf of Mexico.”
Rising oil prices also acted as a tailwind for the oil majors, with tensions in the Middle East maintaining a bid in oil. Higher oil prices on the day helped Shell shares overcome questions about its refining business after it released an earnings teaser.
“Energy giants have been making gains over the past week, as oil prices have headed higher,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“However, Shell’s update this morning has indicated that it’s not been firing on all cylinders. Refining profit margins dropped sharply in the third quarter, compared to the previous one. The energy major has also highlighted that earnings from oil product trading has also come in lower. However, it’s also revised its outlook for upstream oil and gas production, and looks broadly neutral overall compared to previous guidance.’’