Footsie down as oil prices rise
Higher oil prices and the weaker dollar conspired to push markets in London and New York lower today.
After suffering modest losses during the morning, the FTSE 100 Index shed further ground to end the week 44.5 points off at 4760.8.
Gloom in New York helped to dampen spirits in London, with the futures price of a barrel of US light crude standing more than a dollar ahead at 47.55 shortly after London’s close.
The dollar also extended declines against the euro and the yen after Federal Reserve chairman Alan Greenspan said foreign investors eventually may curb their desire to fund the US current account deficit and diversify into other currencies.
The Dow Jones Industrial Average reflected the downbeat mood, standing 97 points adrift after the end of trading in the City.
In London, drugs stocks AstraZeneca and GlaxoSmithKline racked up heavy losses after an official of the US Food and Drug Administration (FDA) called for a safety review of two of their drugs.
AstraZeneca lost £3 billion of its value after the FDA official raised concerns about the safety of its cholesterol-busting drug, Crestor.
Its shares topped the Footsie fallers, dropping 9% or 222p to 2145p as investors fretted that the negative publicity may cause customers to turn their backs on a drug that is expected to account for 12% of revenues by 2008.
GlaxoSmithKline was second in the fallers, weakening nearly 4% or 45p to 1147p after its Serevent treatment for asthma was also singled out for concern by the FDA official, while Shire Pharmaceuticals also felt the backlash from investors as it eased 9.25p to 532.25p.
Supermarket group Morrisons joined the drug stocks near the top of the fallers board as investors continued to worry about reports of a further fall in market share for recent acquisition Safeway. Shares slipped 3p to 224p.
The rally of mmO2 shares appeared to have stuttered to a halt today as investors banked profits in telecoms group.
After two consecutive sessions at the top of the risers board on the back of strong half-year results and a promise to start paying a dividend, O2 eased 1.75p to 114.5p.
However, oil stocks firmed as the price of crude started to creep higher once more. BP moved 4.5p higher to 538p and Shell was 1.5p ahead at 441.5p. Other companies in the sector benefited, with Tullow Oil adding 6.25p to 141.75p and Cairn Energy advancing 25p to 1547p.
Outside the top flight, former blue-chip stock EMI rose nearly 15% or 31.25p to 239.75p after profits figures met hopes and the company spoke confidently about full-year expectations.
Moving in the opposite direction was estate agency group Countrywide in the wake of a profits warning, which left shares 5% or 16p lower at 282p. It dragged down a host of housebuilders with Persimmon 11p worse off at 657.5p, Barratt Developments also 11p cheaper at 523.5p and Westbury down 7.75p at 406p.
The biggest Footsie risers were Amvescap, up 10.25p to 336p, Enterprise Inns ahead 17.5p to 633p, Reuters up 8.25p to 409p and Man Group ahead 26p at 1456p.
The biggest fallers were AstraZeneca, down 222p at 2145p, Glaxo off 45p at 1147p, Dixons down 3.75p at 151.25p and Hays off 2.25p at 122.25p.
