BRITAIN’S top equity index rose yesterday as a drop in UK inflation propped up the stock market in the face of market turmoil caused by Russia, while energy stocks rebounded.
The blue-chip FTSE 100 index endured a volatile session, caused by a plunge in Russia’s rouble currency, before closing up by 2.4 per cent, or 149.11 points, at 6,331.83 points.
Inflation fell to its lowest level in more than 12 years in November, further easing the squeeze on consumers and leaving the Bank of England under no pressure to raise interest rates from record lows.
The rouble plunged more than 11 per cent against the dollar yesterday in its steepest intraday fall since the Russian financial crisis in 1998, as confidence in the Russian central bank evaporated after an ineffectual rate hike. Although the oil price remains near five-year lows, US oil prices staged a recovery yesterday, lifting stocks such as Tullow Oil and Royal Dutch Shell, with Tullow ending 6.3 per cent higher – the best performing FTSE stock in percentage terms.