Market round-up: FTSE rises after volatile session as oil prices give up gains

UK stocks gained ground for the second consecutive day on Wednesday 13 January, despite relinquishing some of their gains late in the session as a rally in oil prices petered out with both benchmarks edging below the $31 (£21.5, €28.7) a barrel threshold.

London's blue-chip FTSE 100 index closed up 0.54% to 5,960.97, while the main European indices also gave up most of the ground they had gained earlier in the day following a positive session in Asia to end the session only marginally in the black.

Having gained as much as 2.4% during the day, oil prices lost momentum late in day as both Brent crude and West Texas Intermediate were trading just below $31 a barrel after US crude inventory figures left investors disappointed.

"The fact that a lower than expected US crude inventories figure would typically be supportive for oil prices, goes to show that for now the oil market is finding buyers hard to come by in the face of such intense selling," said IG's market analyst Joshua Mahony.

However, despite the lacklustre numbers, the slight recovery in oil prices was enough to put commodity-related stocks among the best performers across Britain's two main indices.

BP, which earlier this week announced it will cut a further 4,000 jobs because of the slump in crude prices, Tullow Oil and Ophir Energy were all firmly in the black.

After plunging last week following a profit warning, Sports Direct was among the top risers on the FTSE 100 as the sports apparel retailer completed two "strategic investments" in the US, in a bid to mitigate its over reliance on the UK market.

The company acquired an 11.5% stake in Umbro and Lee Cooper-owner Iconix Brand Group and 2.3% of US retailing giant Dick's Sporting Goods, indicating it hoped to "build a relationship and develop commercial partnerships" with the two US groups.

At the other end of the scale, Lloyd's Banking Group and Sainsbury's both featured among the fallrs on the FTSE 100. The former was downgraded from 'neutral' to 'underperform' by analysts at Exane BNP Paribas, while the latter posted a 0.4% year-on-year decline in sales over the Christmas the period.

The figure, however, was better than the 0.7% drop analysts had expected and prompted the retailer to retain an upbeat outlook for the second six months of its financial year.

Mitie was among the main fallers on London's second tier index, after the management services provider was downgraded from 'equal weight' to 'underweight' by analysts at Barclays, who cited an increase in cost pressures as the main reason behind the move.