FTSE pulled down by interest rates and oil fears
Significant falls by oil stocks and fears of further interest rate rises conspired to drag the FTSE 100 Index below the key 4900 barrier today.
Heavyweights BP and Shell both lost between 1% and 2% of their market value as the cost of a barrel of light US crude slipped from recent record levels to below the $56 mark.
By mid-morning, the Footsie had weakened 46.6 points to 4890.7, with BP and Shell responsible for around 12 points of the fall. The stocks lost 11p and 7.5p to 555.5p and 478p respectively.
The London market also took its lead from New York, where the Dow Jones Industrial Average weakened 95 points last night due to US interest rate jitters.
Although yesterday’s 0.25% increase in rates by the Federal Reserve was expected, its comments about inflation triggered concerns of further moves in the future.
Back at home, minutes from the Bank of England’s rate-setting meeting also strengthened the case for a rate rise as it emerged two members voted for a hike this month.
On a busy day for corporate results, supermarket group Morrisons lost half a penny to 201.25p after boss Sir Ken Morrison announced a major boardroom shake-up in the wake of last week’s profits warning.
Clothing retailer Next was also in the red as it blamed cautious shoppers for a slowdown in sales at its high street stores since January. Shares weakened 4p to 1576p.
Outside the top flight, takeover target Woolworths slipped 0.25p to 54.25p after warning that sales and margins were being hurt by tough trading conditions. Woolworths is waiting to see whether Apax Partners will make a formal £837m (€1.2bn) takeover offer.
But housebuilder Barratt Developments advanced half a penny to 657.5p after saying buyers were still stepping on to the property ladder in sufficient numbers for it to meet its annual targets.
