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UK Stocks Closed Higher on Friday as Oil Price Slump Boosted Banks and Retailers
British stocks closed higher on Friday, as a sharp fall in crude oil prices eased concerns about inflation, encouraging gains in bank stocks and retailers. The gains outperformed losses in mining stocks triggered by weaker metal prices, pushing the broader market higher.Britain's FTSE100 index closed up 11.7 points, or 0.2%, at 5,489.2 points. The index ended the week about 2.5% higher but is still down 15% since the start of the year.
Crude oil prices fell more than 3% to below $116/barrel, down about 20% from a record high above $147/barrel, raising hopes that easing inflation may stimulate consumer and business spending.
Royal Bank of Scotland (RBS)'s better-than-expected financial report boosted its share price to close 3.2% higher. Bank stocks benefited from the surge, leading the gains in the market. In this sector, HSBC rose 19% and Standard Chartered rose 1.7%. However, Barclays Capital fell 2.3% and Halifax Bank (HBOS) also fell 1%.
Retail stocks also rose. Among them, Marks & Spencer closed up 1.4%, Europe's top homewares retailer Kingfisher surged 3.9%, Next rose 5%, and Tesco (TSCO) also rose 1.9%.
However, mining and oil stocks tracked lower commodity prices, with copper hitting a six-month low, nickel falling 5.8%, zinc falling to a two-and-a-half-year low, gold falling more than 2%, and platinum falling to six Month lowest.
BHP Billiton, Anglo American plc, Vedanta Resources, Lonmin, Xstrata, Antofagasta, and Rio Tinto fell between 0.5-4.9%.
Energy stocks fell on weaker crude prices, with BP, SHELL, BGGroup, Cairn Energy and Tullow Oil all down between 1.5% and 4.7%.
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