Oil stocks drag down the FTSE ending its rally – London Report
Traders’ concerns over miners and retailers yesterday pull down London’s main index, ending a week-long run. The FTSE 100 dropped 29.1 points to 6,305.5.
Oil companies were struggled after Saudi Arabia indicated it will work to stabilise oil markets, sending the price pinballing.
Producers ended lower, despite a late rally after the oil price bounced back to $43.55 a barrel for Brent crude.
FTSE 250 oil companies had a bad time of it with Nostrum Oil & Gas dropping 8.9 per cent, while oil field services firm Amec Foster Wheeler lost 3.8 per cent.
For the blue-chips it wasn’t much better: BP finished the day down 0.1 per cent, while BG Group fell 0.7 per cent and Royal Dutch Shell sunk 0.5 per cent.
Miners also finished in negative territory, unable to hold on to their gains throughout last week.
Antofagasta closed down 1.3 per cent, Glencore down 1.1 per cent, BHP Billiton down 1.5 per cent and Anglo American down 0.9 per cent. KAZ Minerals, the FTSE 250 miner, closed the day down 3.7 per cent.
Supermarket Tesco took a beating after it was revealed that Harris and Hoole, its tie-in coffee chain, needs £6m to offset losses incurred from expansion.
Shares in Tesco fell more than three per cent to 165.7p.
Fellow supermarkets Morrisons, and Sainsbury’s caught Tesco’s cold, with shares dropping 2.62 per cent and 1.61 per cent respectively.
The FTSE 250 saw some gains, however. Home Retail Group, owner of Argos and Homebase, was up 6.6 per cent following reports it could be bought by private equity firms for £1bn.
Following confirmation from Prime Minister David Cameron that government defence spending would increase by £12bn in the Strategic Defence and Security Review, defence companies gave the FTSE a shot in the arm, though not enough to push it into the green.
Rolls-Royce finished up 3.8 per cent and BAE Systems was up 1.4 per cent.
The biggest faller in the FTSE 100 Index was Standard Chartered, after Nomura cut its target price to 635p-640p. Shares in the bank closed down 0.92 per cent.
Outsourcing group Mitie also saw its share price bomb following its disappointing profits.