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(Alliance News) - Stock prices in London opened lower on Monday following an impressive rally last week, but oil majors bucked the trend after OPEC and its allies agreed to extend oil production cuts to the end of July.
The FTSE 100 index was down 27.78 points, or 0.4%, at 6,456.52. The large-cap index touched a three-month high of 6,484.30 on Friday in the wake of the positive US jobs report.
The mid-cap FTSE 250 index was down 20.60 points, or 0.1%, at 18,208.72. The AIM All-Share index was down 0.7% at 897.72.
The Cboe UK 100 index was down 0.7% at 10,891.43. The Cboe 250 was down 0.1% at 15,729.91, but the Cboe Small Companies was up 0.1% at 9,805.10.
In mainland Europe, the CAC 40 in Paris was down 0.9% while the DAX 30 in Frankfurt was down 0.6%.
On the London Stock Exchange, International Consolidated Airlines Group was the best blue-chip performer, up 4.1% as British Airways started legal proceedings over what it calls the UK government's "unlawful" quarantine which became effective on Monday.
The government's move will make passengers arriving on international flights have to self-isolate for 14-days. BA's court action comes amid media reports BA has told pilots' union Balpa all 4,300 of its pilots will be fired and re-hired if current employment negotiations break down.
BA's parent company IAG sent a pre-action letter, which is the first stage in a judicial review, to ministers on Friday ahead of the measures coming into effect on Monday.
Oil majors also were among the blue-chip risers tracking spot oil prices higher, with Royal Dutch Shell 'A', up 3.5%, Shell 'B' up 2.9% and BP up 2.5%.
Brent oil was quoted at USD42.79 a barrel Monday morning, up from USD42.16 late Friday after OPEC members, led by Saudi Arabia, and other key oil producers agreed on Saturday to extend historic output cuts through July.
The North Sea benchmark hit a high of USD43.30 overnight - its highest level in three months.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement. But Mexico, which had already made clear ahead of the talks that it "could not adjust...production further", announced that it would not be complying.
"Saudi Arabia and Russia also secured commitments from Iraq, Nigeria, Kazakhstan and Angola not only to increase compliance, but also make good their missed targets over the months ahead. Overall, the agreement was an excellent result for the OPEC+ grouping, not only from a headline reduction point of view, but also from discipline on compliance," said OANDA analyst Jeffery Halley.
In the FTSE 250, Plus500 was the worst performer, down 11%. The contract-for-difference provider said it continued to see record levels of customer trading activity, as heightened levels of market volatility persisted into April and May, but with customers winning at Plus500's expense more often than not.
The online trading platform said it added 100,574 new customers since the start of the second quarter, which is already ahead of its expectations for the entire quarter. It is also in excess of the 82,951 new customers added in the first quarter.
Plus500 said revenue from customer income remains at record levels, generating around USD249.0 million in the second quarter to date. Revenue from customer income means revenue from customer spreads and overnight charges.
However, the company said that total revenue for the second quarter to date stands at less than half of that, USD102.5 million, as customer trading performance has been positive for the customers and negative for Plus500.
Plus500 said it expects customer trading performance to revert back toward historical levels near zero, and it continues to expect full-year revenue and profit to be in line with consensus expectations.
The Japanese Nikkei 225 index closed up 1.1% on Monday. In China, the Shanghai Composite ended up 0.6%, while the Hang Seng index in Hong Kong is up 0.1%.
Japan's economy contracted at an annualised rate of 2.2% in the first quarter, revised from a preliminary reading of a 3.4% contraction, with business investment better than initially estimated, the government said on Monday.
The revised gross domestic product reading in the January-to-March period was almost in line with the 2.0% decline predicted by analysts surveyed by the Nikkei business daily and followed a 7.2% contraction in the last quarter of 2019.
The pound was quoted at USD1.2688 early Monday, lower from USD1.2714 at the London equities close Friday.
The euro was quoted USD1.1284, down from USD1.1307 late Friday.
Industrial production in Germany decreased significantly again in April because of the coronavirus pandemic, Destatis said.
In April, production was down by 18% on the previous month on a price, seasonally and calendar adjusted basis. The restated March figure showed a decrease of 8.9% in production from February.
Excluding energy and construction, production in April was down by 22%.
The year-on-year decrease was 25% in April. This is the largest decline since the beginning of the time series in January 1991.
Against the yen, the dollar was quoted at JPY109.44, soft from JPY109.75.
Gold was quoted at USD1,691.10 an ounce, up from USD1,677.02 late Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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