European stock markets were in the green on Wednesday, boosted by gains in energy stocks as well as rising optimism in the UK economy after it recorded zero coronavirus deaths for the first time since March 2020.
The rally followed an upbeat demand assessment from Organisation of Petroleum Exporting Countries and its allies (OPEC+) and the waning prospect of a speedy return of Iranian barrels.
US crude (CL=F) rose as much as 1% to $68.40 (£49) on Wednesday, while Brent hit above $71 — its highest since March.
"The FTSE 100 built on yesterday’s strong performance to trade solidly higher on Wednesday morning, lifted by rising oil prices which boosted the big energy firms on the index, BP and Shell,” said Danni Hewson, financial analyst at AJ Bell.
Sterling rose as prime minister Boris Johnson addressed concerns over the Delta coronavirus variant. The pound (GBPUSD=X) was up 0.1% against the US dollar after Johnson said that "nothing in the data at the moment" indicated the 21 June reopening can't go ahead. It was up over 0.3% against the euro (GBPEUR=X).
"Basically, the cartel [OPEC+] does want to return the oil supply back to the pre-pandemic level, but it also understands that they still need to practice patience and avoid any urge to make a hasty decision that could hurt oil demand," said Naeem Aslam, chief market analyst at AVA trade. "This is because no one wants to see the oil glut on the market, especially when the threat of the Indian coronavirus variant is still very much on the table."
Elsewhere in Europe, France’s CAC (^FCHI) was over 0.4% higher and the DAX (^GDAXI) closed 0.2% up in Germany, after the European Central Bank (ECB) warned that countries which don't implement digital version of their central bank currencies, could face threats to their financial systems and monetary autonomy.
Watch: Oil prices jump after OPEC forecasts increasing demand
Meanwhile, member nations of a Trans-Pacific trade pact officially agreed on Wednesday to allow the UK to start the entry process. Britain formally requested to join the Progressive Trans-Pacific Partnership (CPTPP) in February this year.
The CPTPP is a trade agreement between 11 countries centred around the Pacific Ocean.
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam form part of the trade bloc. The US had planned to join a precursor to the the bloc, but former president Donald Trump pulled out in 2017.
The agreement is designed to lower barriers to trade and investment between countries. It removes 95% of tariffs — taxes on imports — on each other’s goods.
The UK imported and exported goods and services to the region worth £111bn ($157bn) in 2019, according to the UK government. Trade with the bloc amounted to 8.5% of all UK exports in 2017. Officials say trade with CPTPP members is already growing at a rate of 8% a year since 2016.
Across the Atlantic, major US stock indexes were in the green after the opening bell after a handful of popular stock including AMC Entertainment (AMC) rallied as much as 22% in US premarket trading.
Shares in the cinema chain soared on Tuesday after it reported it had sold 8.5 million newly issued shares to Mudrick Capital, with the hedge fund later flipping all its AMC stock for a profit.
On Wednesday, the US announced and immediately suspended tariffs on certain goods from the UK, Spain, Italy, Austria, Turkey and India over their digital services tax. If implemented, the tariffs on the UK, would hit products including beauty, clothes and footwear and furniture.
It imposed the tariffs after concluding the digital taxes discriminated against US tech firms, were inconsistent with principles of international taxation, as well as burdened US companies.
There are two speeches from the Federal Reserve's Raphael Bostic and Charles Evans later today and the Beige Book will also be released.
Asian stocks were mixed overnight, with MSCI’s broadest index of Asia-Pacific shares outside Japan adding 1.5%. The Nikkei (^N225) closed 0.5% higher in Japan, while the Hang Seng (^HSI) was down 0.7% and the Shanghai Composite (000001.SS) was 0.8% lower.
It comes after the Australian economy continued its rebound, growing larger than it was pre-COVID for the second quarter in a row, helped by its ability to contain coronavirus outbreaks.
The growth, boosted by higher demand and household spending, saw gross domestic product (GDP) expand by 1.8% in the three months to March, according to data from the Australian Bureau of Statistics (ABS).
Watch: What are SPACs?