The FTSE 100 just hit a 2016 high

Emma Haslett
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Is this a sign stock market volatility has begun to ebb?

The FTSE 100 hit its highest level in 2016 this morning, as a strike in Kuwait continued to do what this weekend's Opec summit in Doha couldn't: push oil prices up.

The FTSE rose 0.5 per cent to 6,382 points in the first half-hour of trading, led by miners including Anglo Amercian and Glencore, which rose 3.9 per cent and 2.6 per cent respectively.

Other European markets followed suit, with the Cac 40 rising 0.65 per cent to 4,535 points, while the Dax rose 0.5 per cent to 10,169 points.

Last night, the Dax closed above 18,000 points for the first time since last July.

The renewed strength follows a weekend in which oil prices plummeted following the Doha summit, during which Opec members failed to agree a deal on freezing production.

But analysts suggested traders are beginning to toughen up.

"It may appear to make little real sense, but the relationship between oil and share prices remains closer than ever," said Lee Wild, head of equity strategy at Interactive Investor.

"Oil has shaken off its post-Doha depression, recouping all of Monday's early losses, underpinned by a strike in Kuwait which is taking almost two million barrels of oil out of the system every day."

"The stability in oil prices has strengthened attitudes among traders who are developing a strong appetite for riskier assets," added Naeem Aslam, chief market analyst at Avatrade.

"After an initial plunge in oil prices due to a failed meeting in Doha, oil prices recovered remarkably and this has served as a signal that no more adverse news can cause any major dents for oil. However, it is pairing some gains today."

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