FTSE 100 climbs as Shell hikes investor payouts

British-Dutch oil and gas company Royal Dutch Shell PLC sign , commonly known as Shell is seen on September 14, 2020 in Warsaw, Poland. (Photo by Aleksander Kalka/NurPhoto via Getty Images)
Shell said it would increase payouts to shareholders from its second quarter. Photo: Aleksander Kalka/NurPhoto via Getty Images

The FTSE 100 (^FTSE) jumped higher on Wednesday, boosted by rallying oil and mining stocks.

The FTSE had gained half a per cent by lunchtime in London. The index was initially boosted by Royal Dutch Shell (RDSB.L) before surging mining stocks took over the lead.

Oil major rose over 2% in early trade after announcing plans to hike payouts to shareholders later this month. Shell said it would increase distributions to between 20% and 30% of cashflow from its operations thanks to a rebound in its core business and an improving outlook. The stock pulled back to trade up 1.5% by lunchtime.

Rival BP (BP.L) rallied 0.7% on the back of Shell's announcement. Both stocks also benefited from rising oil prices. Brent futures (BZ=F) were up 1.5% in early trade to reach $75.66 a barrel.

Mining and resources stocks were in demand in London. Anglo American (AAL.L) led the FTSE leaderboard by lunchtime with a gain of 3%. BHP (BHP.L) rose 2.4%, Rio Tinto (RIO.L) was 2% higher, and steel business Evraz (EVR.L) rose 1.9%.

Stocks were catching bids on the continent too. France's CAC 40 (^FCHI) was up 0.1% in early trade and the German DAX (^GDAXI) rose 0.9%. Demand for resources helped the German index too, with Heidelberg Cement (HEI.DE) shooting up 4.4%.

Markets were mostly lower in Asia overnight. Japan's Nikkei (^N225) fell 1% as the country's leading economic index came in lower than expected. South Korea's KOSPI (^KS11) slipped 0.6%. On the Chinese mainland, the Shanghai Composite (000001.SS) rallied 0.7% and the Shenzen Component (399001.SZ) gained 1.8%.

The Hong Kong Hang Seng (^HSI) dropped 1% amid mounting fears about Chinese action against tech giants such as Alibaba (9988.HK) and Didi (DIDI). 

Shares in ride-hailing giant Didi crashed 20% in its New York IPO after Chinese regulators opened a data probe of the company and called for its removal from the country's app store. The stock was down another 3.9% in the pre-market.

Wall Street looks set for a higher open. S&P 500 futures (ES=F) were up 0.2%, Dow futures (YM=F) were up 0.1%, and Nasdaq futures (NQ=F) ticked 0.5% higher.

Watch: What are SPACs?

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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