London Markets: London markets advance as major oil companies react to alleged attack

London markets were led by major oil companies as benchmarks jumped on news of an incident involving two oil tankers near the Strait of Hormuz.

How did markets perform?

The U.K.’s FTSE 100 UKX, +0.22%  also edged up 0.2%, following Wednesday’s 0.4% decline.

The pound GBPUSD, -0.0630%  ticked down 0.1% to $1.2674. It traded flat Wednesday.

Oil rallied significantly on news of an incident in the Gulf of Oman. The West Texas intermediate (WTI) CLN19, +3.30%  benchmark was up 2.8% to $52.59/bbl, while the Brent contract BRN00, +3.69%  was 3.2% higher at $61.90/bbl.

What’s moving the markets?

A Reuters poll of economists said the chances of an interest-rate cut by the U.S. Federal Reserve have risen sharply, citing global trade tensions. Analysis in the FT suggested traders appear to be shrugging off potential stimulus by the European Central Bank, as neither the euro nor bond yields reacted as expected to last week’s dovish talk at the ECB meeting. And China Daily reported that economists expected a cut in the reserve requirement ratio (RRR), as well as possible interest rate cuts, to counter trade war related tension.

In the U.K., Conservative MPs begin the first round of voting to choose a leader to replace outgoing Prime Minister Theresa May. A key aspect of the debate among the leading candidates is whether they would consider suspending Parliament to push through a no-deal Brexit.

Which stocks are active?

Oil producers rallied on news that two oil tankers were damaged near the Strait of Hormuz, according to the U.S. Navy, by what they called a “reported attack”. The crews have been evacuated but no casualties have been reported. Royal Dutch Shell PLC Class A RDSA, +0.42%  shares were up 0.5%, while BP PLC BP, +0.02%  , which opened in negative territory, is flat.

The results of Germany’s hotly contested 5G spectrum auction came in higher than expected at €6.6 billion raised. One of the successful bidders, Vodafone Group PLC VOD, +0.99%  shares were 1.4% higher.

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