FTSE 100 hits 10000 Points!!

Good evening and welcome to another day of market updates.

Well markets have started the year very, very well as the Ft100 surged back above 10000 points and the Dow Jones recorded its highest price ever.

It was up over 800 points at one stage before settling up600 points at 49000!!!

Shares in US energy companies have jumped as investors bet that the US seizure of Venezuelan President Nicolás Maduro will open opportunities to tap the country's oil reserves.

Shares in Chevron opened more than 4% higher, after surging more than 7% in pre-market trading, while other firms, including ConocoPhillips and Exxon also gained.

Precious metal prices and shares in defence stocks also rose as the intervention increased investors' concerns about geopolitical risks.

Gold was about 1.9% higher at $4,412 (£3,275) an ounce, while the price of silver was up by 3.6%, as money was moved into so-called "safe-haven" assets.

Prices of precious metals such as gold and silver often rise in times of uncertainty as they are seen as safer assets to hold.

The gold price saw its best annual performance last year since 1979 after rising by more than 60%, reaching an all-time high of $4,549.71 on 26 December.

Those gains were driven by several factors including expectations of more interest rate cuts, major purchases of bullion by central banks and investor concerns about global tensions and economic uncertainty.

Oil prices fluctuated on Monday as investors weighed whether Washington's intervention in Venezuela would affect crude supplies. Brent crude rose more than 1% to nearly $61.50 a barrel, still below highs seen in recent years, as analysts said ample global supplies would offset any disruption.

Shares in Chevron, the only US company currently operating in Venezuela, rose 4%, while Spanish energy firm Repsol, among the other few Western energy firms with a presence in the country, gained 2%.

Oil services firms also climbed, with Haliburton up more than 7%.

US President Donald Trump has vowed to tap into Venezuela's vast oil reserves after seizing Maduro and said that the US will "run the country until such time as we can do a safe, proper and judicious transition".

But industry analysts have said the move is unlikely to have an immediate impact on how much people and businesses pay for energy.

Experts have also said it would cost billions of dollars to fix Venezuela's oil infrastructure, which has been in sharp decline since the early 2000s.

Venezuela's crude production has been "lacklustre" for years and now only accounts for around 1% of global oil output, said investment strategist Vasu Menon from OCBC bank.

The former chief executive of BP, Lord Browne, told the BBC's Today programme that for Venezuela to revive its oil production would take "a tremendous amount of skill investment and time".

While there might be a "quick pick up" of some production, he added, output might actually fall while the industry is reorganising.

What a strange world we live in?

Have a great week!

Best Regards

S Dhanda

Partner  

FTSE 100 hits over 1000 points!!