Oil stocks lead FTSE 100 rebound

Oil stocks led a resurgent FTSE 100 on Tuesday, as the main London index joined a global stocks rebound and reached its highest level in five sessions.

The rebound came as London traders returned from the long Easter weekend hoping that last Friday's lacklustre US jobs data could mean that the Federal Reserve has more time to take interest rates off historic lows.

Brent crude rose sharply during the Easter break as the oil market reassessed how long it might take Iran to re-establish supply following the lifting of sanctions against the country.

While gains faded for Brent on Tuesday, equities traders used their first chance to react to the public holiday price action to snap up oil stocks. Weir Group, the oilfield services provider, rose 3.3 per cent to £17.95, the best single gain on the FTSE 100. BG Group was in second place, up 3.3 per cent at 880.7p. Royal Dutch Shell rose 2.1 per cent to £20.66 and BP was 1.9 per cent higher at 451.3p.

There was a straight read-across for heavy fuel users, with airlines landing at the bottom of the index. IAG, the parent of British Airways and Iberia, was down 1.1 per cent, making the biggest single loss. EasyJet fell 0.4 per cent to £18.37.

As risk appetite improved, there were only nine stocks listed as fallers in morning trade. Overall, the FTSE 100 was 1.2 per cent higher at 6,913.17, a rise of 79 points.

"With US job creation very disappointing in March, investors are hoping that this should delay the point at which the Fed will begin hiking rates, as well as reducing the potential extent of the likely peak in the cycle," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.

"As a result, 'bad' economic news is being perceived as positive, especially for those markets that would have suffered the most from higher US rates."

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