At the close: FTSE falls after oil price drop erases earlier gains
A meandering start to the week saw the FTSE 100 climb strongly shortly after the open only to fall back before lunch time.
The blue-chip index ended the day at 6,136.43, down 0.32 per cent from yesterday's close price.
The falling oil price, down over one per cent and moving away from the psychologically important $50 per barrel mark, was a drag on oil stocks.
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Royal Dutch Shell, down 1.3 per cent, and rival BP, down 1.1 per cent, were two of the FTSE's worst performers.
Jasper Lawler, analyst at CMC Markets, said:
It was a directionless start to the new week for European markets as investors digested more hawkish Fed speak, a drop in the price of oil, improved French and German economic data and another mega-merger facing regulatory headwinds.
The FTSE 100 flat-lined amid the latest dire economic forecasts for the UK from the Treasury was there to be a Brexit. Most sectors on the FTSE were higher but losses in the heavily-weighted mining and oil and gas shares brought the average down.
Elsewhere stocks were being largely pushed around by brokers notes.
Satallite operator Inmarsat led the index lower, finishing down four per cent, after analyst at Morgan Stanley downgraded the stock and slashed the price target to 800p from 1,350p as it cut its earnings forecasts.
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The firm is facing relegation from FTSE 100 after its share price has slumped by over 30 per cent so far this year. A profit warning in early March sent shares sharply lower.
At the positive end of the index Royal Mail climbed by 4.3 per cent following analysts notes from RBC and Cantor Fitzgerald that both raised their outlook.
Cantor’s Robin Byde said:
Royal Mail’s full year update was encouraging. Revenue and operating profits were up year on year and ahead of consensus estimates. European parcels continue to drive growth with cost cutting and productivity gains helping to protect margins in UK letters.
Venture capital company 3i had its positive ratings maintained by both Barclays Capital and Canaccord Genuity.