Rolls-Royce shares rocket to recovery as FTSE 100 takes off
Shares in City heavyweight Rolls-Royce helped lead London’s blue-chip index higher this morning as markets were buoyed by hopes of peacetalks in the Middle East.
Rolls-Royce stock soared as much as seven per cent on open to 1,215.00p.
It followed comments from Donald Trump that the US would “leave” Iran in “two to three weeks”.
Speaking at the White House, the President said Iran was “begging” for a deal but described reaching one as “irrelevant” to America’s timetable.
The comments helped sooth investor nerves, which had spiked in the last month and led to the FTSE 100 suffering its worst month since Covid and falling below the magic 10,000 mark.
Rolls-Royce – which is one of the City’s most valuable stocks with a mammoth market cap of over £100bn – suffered major losses amidst the market sell-off of the last few weeks.
The stock still remains down around 10 per cent for the last month.
Also leading the index higher on Wednesday morning was defence giant Babcock and British Airways owner IAG, each advancing over five per cent.
“Investors will feel like their head is spinning after yesterday’s ‘buy everything’ surge in global stock markets,” Chris Beauchamp, chief market analyst at IG, told CityAM.
“Whether it was from short-covering, mad-cap bargain hunting or just some quarter-end shenanigans, many will hope that stocks have found a low, particularly if the US does decide to shuffle off the stage in the Middle East.”
Fuel shortage fears run rife
The international benchmark for oil prices, Brent crude, which has served as a crucial indicator for market volatility amid the conflict, tumbled near four per cent on Wednesday morning and slipped under $100.
An end to the conflict would come as firms desperately cry out for some reprieve amid concerns around fuel shortgages.
Thousands of flights have been cancelled, and more are expected to be cancelled, as global airlines struggle with surging fuel costs, which has hit firms like Rolls-Royce and IAG.
Wizz Air, which gave a €50m profit warning from the disruption caused by the war, jumped over seven per cent during early trading on Wednesday amid hopes of the war ending.
But speaking on Times Radio this morning, business secretary Peter Kyle insisted there was no supply chain issue for jet fuel “at this moment”.
Kyle said: “I was looking immediately after the conflict started, where we interact in order to get resilience into our society, into our economy, we’ve been working with all these key sectors, identifying sectors where there may well be challenges down the track.”