FTSE close: Libya fear continues; rates hint
17.05 (close)
Domino effect: Markets fear the unrest in Libya will spread to other oil producers.
Blue chip stocks remained deep in the red and oil prices surged past 110 dollars a barrel as the crisis in Libya showed no sign of easing today.
The cost of Brent crude raced ahead amid more reports of bloodshed and violence and as the Libyan chaos forced foreign energy companies to suspend production.
London's FTSE 100 Index closed more than 1.2% lower, down 73.2 points at 5923.5.
The Dow Jones Industrial Average on Wall Street fell more than 50 points as it too suffered from fears over the political unrest, while sentiment was also hit by technology giant Hewlett-Packard's move to warn over the 2011 outlook in after-hours trading yesterday.
Markets across the globe are suffering as investors fear that a rise in the price of oil could derail the global economic recovery.
Libya holds the most oil reserves in Africa and is the world's 15th-largest crude exporter at 1.2 million barrels per day.
In events closer to home, the pound rose against the dollar after minutes showed a third member of the Bank of England's rate-setting committee voted for a hike in borrowing costs earlier this month.
The other six members, including Bank governor Mervyn King, voted in favour of no-change but economists said the report fuelled speculation that rates could rise in May. Sterling reached an annual high against the dollar at 1.62.
Commodity-based stocks were impacted by the uncertainty in Libya as Antofagasta dropped 70p to 1313p and Xstrata shed 62p to 1347p.
Drinks can maker Rexam delivered the biggest fall in the FTSE 100 despite detailing a 45% rise in annual underlying profits to £412 million for 2010.
The figures were ahead of market expectations, but with Rexam's shares enjoying a strong run in recent weeks the stock fell back 6% or 21.6p to 348.4p.
The UK's part-nationalised banks were in the spotlight after the Qatari Prime Minister signalled interest in buying part of the Government's stakes in Lloyds Banking Group and Royal Bank of Scotland in a press conference after talks with David Cameron.
RBS, which is expected to report losses of £700 million for 2010 tomorrow, closed 0.4p lower at 47.3p.
Lloyds - predicted to reveal profits of £2 billion on Friday - fell 0.8p to 65.5p.
In the FTSE 250 Index, shares in Cable & Wireless Communications jumped 6% - up 2.9p to 49.3p - after the company announced plans to sell its operating business in Bermuda and return cash to shareholders.
Builders' merchant and Wickes owner Travis Perkins rose in early trading after it revealed a 20% rise in underlying profits and said the new financial year had started well.
However, the share price improvement failed to stick and the Northampton-based company was later down 3%, or 35p to 1004p.
The biggest Footsie risers were Amec ahead 10p at 1138p, Land Securities up 6p at 741p, BG Group up 8.5p at 1452.5p and Imperial Tobacco Group ahead 10p at 2001p.
The biggest Footsie fallers were Rexam down 21.6p to 348.4p, Antofagasta off 70p to 1313p, Xstrata down 62p to 1347p and Weir Group off 72p to 1630p.
14.55: The Dow Jones is trading in the red again after US stocks fell sharply yesterday on the back of violent unrest in Libya and a soaring oil price.
It was down 36.3 points at 12,176.5 shortly after the opening bell.
Apple will be in the spotlight as it is due to hold its annual shareholder meeting today. US investors are also eyeing a worse than expected sales forecast from Hewlett-Packard.
The FTSE 100 is 49.2 points lower at 5,947.6.
13.00:
At lunchtime the FTSE 100 is 26.95 points lower at 5969.81.
The UK's part-nationalised banks are featuring among the minority of risers today ahead of results later in the week.
Lloyds Banking Group, which is expected to report annual profits of £2bn on Friday, rose 0.9p to 67.2p, while Royal Bank of Scotland has added 0.4p to 48.1p on the eve of its figures tomorrow.
In the FTSE 250 Index, shares in Cable & Wireless Communications are 8% - up 4p to 50.4p - after the company announced plans to sell its operating business in Bermuda and return cash to shareholders.
Builders' merchant and Wickes owner Travis Perkins is up 2% after it revealed a 20% rise in underlying profits and said the new financial year had started well.
However, the share price improvement failed to stick and the Northampton-based company was later flat at 1039p.
11.10:
A small rise in interest rates in the coming months now looks more likely after opinion at a divided Bank of England was shown swinging behind a hike.
Minutes of this month's monetary policy committee meeting revealed today not only that Spencer Dale joined fellow members Andrew Sentance and Martin Weale in voting to raise rates from 0.5% - but also that Sentence voted for a hefty 0.5% hike.
We have a full report here.
Sterling has made gains this morning. At 10am, the pound was at $1.6240 compared to $1.6128 at the previous close. Against the euro, the pound was €1.1850 compared to €1.1811 at the previous close.
The FTSE 100 is trading down 41.1 points at 5,955.7.
09.45:
The FTSE 100 is lower as investors continue to sell equities across the globe as the fighting in Libya threatens to make a significant dent in oil supplies.
The Footsie is 41.31 points lower at 5955.45, reinstating the downward trend that was only briefly halted yesterday as UK shares took heart from positive US consumer confidence data.
Oil prices on the New York Mercantile Exchange neared $96 a barrel - the highest since October 2008 – while brent crude is now at $106.46 as the Libyan government cracked down on protesters and foreign energy companies suspended oil production.
Libya holds the most oil reserves in Africa and is the world's 15th-largest crude exporter at 1.2m barrels per day.
Commodity-based stocks were impacted by the uncertainty as Kazakhmys dropped 26p to 1422p, Lonmin fell 30.5p to 1796.5p and Antofagasta declined 28p to 1355p.
Rexam provided the biggest fall in the FTSE 100 Index despite detailing a 45% rise in annual underlying profits to £412m for 2010. The figures were ahead of market expectations but with Rexam's shares enjoying a strong run in recent weeks the stock fell back 4% or 13.6p to 356.4p.
In the FTSE 250 Index, shares in builders' merchant and Wickes owner Travis Perkins rose 2% - or 15.5p to 1054.5p - after it revealed a 20% rise in underlying profits and said the new financial year had started well.
Minutes from the February bank of England Monetary Policy Committee are out and they show that a third member is now in the rate rise camp – joining messrs Sentance and Weale.
Check back later for a full report, including how that has moved sterling.
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