Oil majors decline while airlines gain

In early morning trade, only 11 of the FTSE 100 stocks are trading in the red, with oil companies making up the bulk of this number.

News that the US has struck a deal with Iran on its nuclear activities has seen both WTI and Brent oil prices decline, and has to a degree lessened the risk premium normally associated with Middle-East tensions. The fall-out has seen stocks for the major oil companies such as BP and Shell take a tumble in early trade.

Today's biggest faller is Randgold Resources, which has lost 2.5% as gold continues its steady price decline. With mining output set to hit record highs this year, the bulls cannot rely on production cuts to offset the price slide or weak demand.

Airlines have been clear beneficiaries of the pull-back in the oil price, with International Consolidated Air (IAG) and easyJet taking the top spots on the UK benchmark, supported by broker upgrades.

Perhaps the market is somewhat jaded with the constant run of banking scandals. The Royal Bank of Scotland share price has shown little reaction to reports that the 81% state-owned bank is to come under investigation. Claims have been made that it put some ‘good and viable’ businesses into default in a bid to boost profits. The stock has gained 0.7% in early trade.

UK mortgage approvals saw a small decrease in October, falling to 42,808 from 43,182 the previous month, and failed to match estimates of 45,200. This report has seen sterling back away from the $1.62 level against the US dollar. The bigger picture would indicate that this is merely a blip. Tomorrow’s housing price index release will give more clues to the activity in the British housing sector. New mortgage approvals data due on Friday will also contribute to the boom/bubble debate.

Later this afternoon, the most important data points include the US pending home sales data followed by the Dallas Fed manufacturing business index.

The Dow is currently set to open 50 points higher at 16,114.

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