A 0.7% rise in the FTSE 100 to 7,188 should certainly bring a smile to investors, with similar gains seen across most of the key markets in Europe. Even parts of Asia had a spring in their step, with the Nikkei up 1.5%.
Brent Crude pushed ahead 0.8% to $83.85 per barrel, natural gas showed no sign of stopping as it advanced another 6.7% to 251.73p per therm, and even sterling was intent on making ground as it rose 0.2% against the US dollar to $1.3699.
Stronger energy prices provide a tailwind to the FTSE 100 because Shell and BP are such big constituents of the index and their shares tend to do well when oil and gas prices rise.
However, a stronger pound is typically bad for the UK stock index because so many of its members earn money in foreign currencies, particularly the US dollar.
Russ Mould, investment director at AJ Bell, said: “The reason why the currency movement hasn’t weighed on the FTSE today is down to the strength in the broader natural resources sector. Stocks like Anglo American, Antofagasta and Rio Tinto are rising because metal prices are moving ahead, most importantly copper.
“There had been fears in the market in recent months that a slowdown in the pace of economic growth in China, together with any fallout should property giant Evergrande collapse, might affect commodities demand from the Asian superpower.
“On a broader basis, a slowdown in the global economic recovery could easily trigger a pullback in commodity prices in the near-term, but for today it seems that investors are very much risk-on.”