FTSE close: Oil pushed higher; Intertek profit

 

17.10 (close)

Dealers monitor their screens on the trading floor of IG Index in London

Monday: Shares cannot shake Middle East fears.

The London market reversed earlier gains to closed lower today as worries over surging oil prices and the economic crisis in Greece rattled investors.

The FTSE 100 Index was down 16.6 points at 5973.8 as fears over the potential for civil war in Libya saw Brent crude hit 118 US dollars a barrel before edging back to $116.

Elsewhere, the eurozone debt crisis was drawn back into the spotlight following the decision of ratings agency Moody's to downgrade Greece's debt to even further below junk status.

The Greek government immediately hit back and said the rating was "completely unjustified" and did not reflect an "objective and balanced" assessment of the conditions Greece is presently facing.

But the move hit banking shares with Lloyds Banking Group down 1.1p at 61p, Barclays off 5.2p at 307.95p and Royal Bank of Scotland dropping 0.3p at 43.8p.

The pound lost further ground ahead of this week's Bank of England rate-setting meeting, when interest rates are expected to be held. Sterling was down against the US dollar at 1.61 and the euro at 1.15.

Some support was given by the emergence of a number of major takeover deals, led by fashion conglomerate LVMH's plans to buy Italian jeweller Bulgari for $6bn (£3.6bn), which saw potential target Burberry move ahead 4% or 42p at 1200p.

Hard drive maker Western Digital also plans to buy Hitachi Global Storage Technologies, while Rolls-Royce and Daimler disclosed they are in talks with German engines giant Tognum about a potential £2.5bn deal.

Blue-chip testing firm Intertek was the biggest Footsie gainer, up 5% or 95p to 1994p, after it accompanied an 11% hike in annual profits to £211.9m with the £450m acquisition of Moody International.

The deal for the Haywards Heath-based firm, which employs 2,500 people, will boost Intertek's presence in the energy sector.

But news of slowing growth at satellite operator Inmarsat sent it to the top of the fallers board, down 13% or 91.5p to 593p.

While it posted sharply higher profits for 2010, Inmarsat said revenues growth slowed in the final quarter of 2010 and early part of this year, particularly in the maritime sector.

Second-tier player Forth Ports was also in the spotlight after the Tilbury docks and Grangemouth container port owner revealed a new takeover approach from infrastructure fund Arcus valuing the group at around £750m.

The latest proposal is worth 1630p a share and is higher than the 1400p - or £640m - rejected by Forth from a consortium featuring Arcus in April. Forth's shares, which have jumped in recent days on market speculation of a new bid, were 5% or 82p higher at 1605p.

The biggest Footsie risers were Intertek up 95p at 1994p, Burberry ahead 42p at 1200p, Investec up 9.9p at 474.5p and International Power ahead 6.1p at 324.8p.

The biggest Footsie risers were Inmarsat down 91.5p at 593p, Vedanta Resources off 87p at 2365p, Serco down 19p at 599.5p and Rio Tinto off 104p at 4210p.

16.20: The FTSE 100 gave up earlier gains to trade almost flat as the end of the session approaches.

It is up 6.16 points at 5,996.6 after sentiment on Wall Street turned sour.

The Dow Jones is trading 42.2 points lower at 12,127.7 as investors remained concerned about the deepening civil strife in Libya and the surging oil price.

Gold hit a fresh high earlier today, amid a growing appetite for safer assets. We have more on that here.

15.25

US shares have joined in the European rally and the Dow Jones is 28.9 points higher at 12,198.9 after an hour on Wall Street.

In London, the FTSE 100 is 35.82 points better off at 6026.21.

In other news today, interest rate-watchers are poring over the CV of new rate-setter Ben Broadbent for clues on how he may vote, following his appointment to the MPC.

There's more here.

14.20

The FTSE 100 is 39 points higher at 6029.48 as trading gets underway on Wall Street.

Check back for an update on how US shares have performed.

13.00

The FTSE 100 has shaken off early falls today and is now above 6,000 despite pressure from higher oil prices. Intertek is leading the risers after reporting higher profits.

The Footsie has tracked the performance of European markets as the top flight recovered from a shaky start to stand 32.2 points higher at 6022.63.

European debt fears resurfaced after Moody's lowered its credit rating for Greece by three notches to B1 from Ba1 and warned it may cut again if the government's commitment to its austerity programme wanes or international benefactors become less willing to support it.

We've got more on that here.

12.20

Gold surged back to a new high at midday today, passing the high of $1,440 set last Wednesday.

The spot price touched $1,443.50 as hopes for a quick resolution in Libya ebbed away.

Investors turn to the precious metal in times of strife and as a protection against inflation.

The events in the Middle East have therefore provided a double boost for gold amid political uncertainty and with world oil prices surging and creating even greater price pressure.

12.00: At noon the Footsie is headed higher, 39.64 points up so far at 6030.03.

One story doing the rounds today is the plan put forward by Stephen Williams, the co-chairman of the Lib Dem's Treasury policy committee, to re-privatise RBS and Lloyds by distributing shares to all 45m adults on the British electoral register.

The plan, could see each UK citizen receive about 1,450 shares in RBS and 440 in Lloyds. Here's the detail.

It's all pie in the sky at the moment and the banks' shares are largely unaffected. Lloyds is 0.09p lower at 62.03p, and RBS is 0.47p up at 44.53p.

10.45:

We've got more detail on the latest oil price movements.

Worrying signals in Saudi Arabia have put a question mark over supply there. Officials and governments are working on plans that will secure supplies until the violence in the Middle East abates.

Read the full story here.

Back in equities, the Footsie is 27.31 points higher at 6017.70.

09.30:

The FTSE 100 struggled to make progress as Middle East fears pushed oil higher again, while Intertek led the risers after posting higher profits.

The Footsie lurched in and out of the red in early trading and has settled roughly flat – 0.8 points down at 5990.31 by 09.30.

Surging oil prices have continued to hurt sentiment. Fierce fighting in Libya and fears of unrest in Saudi Arabia meant that Brent Crude rose to $117.20 a barrel, while US benchmark crude for April delivery hit its highest level for two-and-a-half years, at $106.

Public protests have been banned in Saudi Arabia following demonstrations, but there are worries the kingdom will not be able to control protests ahead of a so-called 'day of rage'.

In London, the top tier saw the latest flurry of annual results, while takeover news provided the main interest in the FTSE 250 Index.

Blue-chip testing firm Intertek was the biggest Footsie gainer, up 88.5p to 1987.5p after posting an 11% hike in profits.

But news of slowing sales growth at satellite operator Inmarsat sent it to the top of the shares fallers, down 71.25p to 613.25p.

Second-tier player Forth Ports was in the spotlight after the Tilbury docks owner revealed a new takeover approach from an infrastructure fund valuing the group as around £750m. Its shares jumped 5% or 77.5p to 1600.5p.

In currency, the pound is at $1.6292 compared to $1.6246 at the previous close. Against the euro, the pound €1.1654 compared to €1.1624 at the previous close.