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Wall Street jumps and FTSE 100 hits two-month high as oil recovers

FTSE 100 A man crosses Waterloo Bridge during the evening rush-hour with skyscrapers of the City of London financial district seen behind in London, Britain, October 10, 2022.  REUTERS/Toby Melville
The FTSE 100 has bounced back after a rout in oil prices dragged down energy companies on the blue-chip index on Monday. Photo: Toby Melville/Reuters

The FTSE 100 and European stocks were mostly higher this Tuesday, with the UK’s benchmark hitting a two-month high, as oil stocks bounced back.

On Wall Street, stocks rose as traders looked past more China COVID lockdowns and instead focused on a host of strong earnings reports

The Dow Jones (^DJI) climbed 0.80% to 33,968. The S&P 500 (^GSPC) gained 0.72% to 3,949 points and the tech-heavy Nasdaq (^IXIC) rose 0.49% to 11,079.

At the close, the FTSE 100 (^FTSE) was 1.03% higher at 7,452, while the CAC (^FCHI) in Paris advanced 0.35% to finish at 6,657 points. In Germany, the DAX (^GDAXI) gained 0.29% to 14,422.

Read more: Do we need to get over our fixation with fixed rate mortgages?

The commodities-heavy FTSE 100 traded at its strongest level since September 13.

FTSE-listed AO World (AO.L) surged 16%, as the online electrical retailer forecast top-end full-year earnings despite reporting increased half year losses of £12m compared to £4m.

Founder and chief executive John Roberts said the firm's turnaround plan to strip out costs was paying off.

Meanwhile, Brent crude (BZ=F) bounced back to $89 a barrel after Saudi Arabia denied a report in the Wall Street Journal that oil producers were discussing a production increase for their next meeting, saying a cut approved last month would stay in place until the end of 2023.

BP (BP.L) shares have risen 6.52%, with North Sea producer Harbour Energy (HBR.L) up 7.05% and Shell (SHEL.L) climbing 4.84%.

"Saudi Arabia’s denial of the output increase contributed to a 12% round-trip in front-month Brent prices over the past 24 hours," Stephen Innes, managing partner at SPI Asset Management, said.

"It is possible that the suggestions to expand Opec+ production were floated to gauge the price reaction. The initial negative follow-through implies that demand concerns warrant a relatively modest increase in output if Opec+ is looking to stabilise prices once the EU embargo kicks in."

However, traders have to digest the news from the OECD saying that the UK is set to be second-worst performing major economy next year.

Read more: Two-decade UK wage stagnation to cost workers £15,000

In Asia, Tokyo’s Nikkei 225 (^N225) rose 0.61% to finish at 28,115 while the Hang Seng (^HSI) in Hong Kong tumbled 0.95% to 17,488. The Shanghai Composite (000001.SS) finished in the green, gaining 0.13% to 3,088 points.

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