May 30, 2018 / 8:36 AM / 3 months ago

Oil majors steady Britain's FTSE after global sell-off

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* FTSE 100 index flat

* BP up 1 pct, Shell gains 0.8 pct

* Financials suffer

By Julien Ponthus

LONDON, May 30 (Reuters) - A rebound by oil majors helped to steady Britain’s blue-chip index after a global sell-off prompted by the political crisis in Italy, concerns about euro zone stability and fresh fears of a trade war between the United States and China.

The UK’s FTSE 100 was up 0.07 percent at 0814 GMT but spent most of the first trading hour in negative territory.

Heavyweights BP and Royal Dutch Shell added 1 percent and 0.8 percent respectively as oil prices steadied after falling steeply in recent days on concerns that Saudi Arabia and Russia would pump more crude in response to falling global oil inventories and rising consumer prices.

With little corporate news or fresh economic indicators to help investors assess the health of the British economy, the fate of the session is likely to be linked to developments on the Italian political front or on the U.S. trade policy of the Trump administration.

“With little else on its agenda, the FTSE will be hoping that things don’t take another downturn in the euro zone,” said Spreadex analyst Connor Campbell.

British banks weighed most heavily on the FTSE 100, with Lloyds, Standard Chartered, RBS and HSBC down by between 0.5 percent and 1 percent.

European banks are still under pressure after the sector suffered heavy losses in the previous session on fears about the sustainability of Italian government debt and the euro zone.

On Wall Street the threat prompted a rush to traditional safe havens such as U.S. debt, pulling down U.S. 10-year Treasury yields and triggering losses for U.S. banks, which registered their biggest one-day decline in more than two months.

Among smaller UK companies, engineering firm Bodycote rose nearly 7 percent after predicting it would top market expectations for full-year profit and said it would pay a special dividend.

British discount retailer B&M European Value reported a 25 percent jump in full-year profit on Wednesday and rose 0.2 percent.

Among small-caps, Photo-Me International tumbled 22 percent after the photobooth operator’s market update disappointed investors. (Reporting by Julien Ponthus Editing by David Goodman)

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