A stiff hike in oil prices cast a cloud over the London market today as they helped wipe out some solid gains enjoyed during earlier trading.
Light, sweet crude leapt more than six dollars to top US$121 a barrel for the first time in around two weeks amid fears the ongoing tension between Russia and the West may affect global supplies.
It saw the FTSE 100 Index close 1.6 points down at 5370.2, obliterating a healthy 30 point gain see earlier in the session. The dip came as New York opened on the back foot thanks to the oil spike and continued fears for the financial sector.
London's drop overshadowed a strong session for housebuilders after investors were cheered by Persimmon's half-year results.
Relief that sales had not worsened further in a tough market and a lack of unpleasant surprises helped the Charles Church builder 9% higher, or 28.5p to 327p, despite a 64% fall in profits. Broker Panmure Gordon also upgraded the stock from a sell to a hold.
FTSE 250 firm Persimmon was surpassed by Barratt Developments - up nearly 14% or 15.5p to 128.25p - while Taylor Wimpey, which is due to post figures next week, added 1p to 42.25p.
The soaring oil prices and stronger metals bolstered commodity stocks in the top flight. Irish oil exploration firm Tullow Oil was the best performer, gaining 58p to 799.5p, while Cairn Energy added 139p to 2876p. BG Group also finished 34p better at 1176p.
Among the miners, Eurasian Natural Resources cheered 35p to 1062p after first-half profits more than tripled and it said it expected further record commodity prices. Kazakhmys joined in the rally to claim top spot on the Footsie risers board with a gain of 64p to 1324p, or 5%.
Oil-dependent firms such as British Airways and second tier rival easyJet were notable among the fallers, down 8p to 240.25p and 14.5p to 424p respectively. Cruise ship giant Carnival also shed 58p to 1782p, with Aviva the Footsie's leading faller off 22.5p to 477p.
The mood was also bleaker in the banking sector as firms struggled to shake off fears about the potential deepening of the global financial crisis.
Renewed speculation that US mortgage finance firms Freddie Mac and Fannie Mae will need a government bail-out weighed on trading.
Today, Lloyds TSB declined 10.25p to 280p, Halifax Bank of Scotland slipped 8.25p to 272p and HSBC fell 22p to 805.75p.
Marks & Spencer was another faller as fears grow about the retailer's performance in the current tough climate. Official retail sales data for July showed more shoppers using the discount sector, and M&S shares closed 6p lower at 246p.
The Footsie's four biggest risers were Tullow Oil, up 58p to 799.5p, Kazakhmys up 64p to 1324p, Cairn Energy up 139p to 2876p and Xstrata which ended the day up 152p to 3160p.
The four biggest fallers were Aviva, down 22.5p to 477p, Whitbread down 48p to 1089p, Lloyds TSB down 10.25p to 280p, and Schroders which closed down 31.5p to 939p.
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A stiff hike in oil prices cast a cloud over the London market today as they helped wipe out some solid gains enjoyed during earlier trading.
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