Oil price weighs heavily on FTSE

The London market was knocked back today as oil continued its record run and investors braced themselves for big losses on Wall Street.

Banks were among the main losers as the FTSE 100 Index mirrored falls for Europe’s major indices and shipped some of the steady gains seen over the past days.

With predictions of a 100 point opening fall for the Dow Jones Industrial Average later today, the Footsie was 92 points down at 6178.8 by mid-morning.

Banks featured heavily on the faller’s board after a downgrade for Barclays by broker Pail International. Shares in the bank were down 13.25p to 449.75p.

Britain’s biggest mortgage lender Halifax Bank of Scotland was also off, losing 21p to 492.5p, with Royal Bank of Scotland slipping 14p to 343.25p. Lloyds TSB was on the back foot, too, losing 15p to 428.75p.

Mobile phone retailer Carphone Warehouse was the Footsie’s main casualty, shedding more than 6%, or 19.25p, to 269.75p.

It came after a sell recommendation from Citigroup in the wake of the retailer’s plans to create a European consumer electronics empire after striking a £1.1bn (€1.4m) deal with US group Best Buy.

Nuclear power provider British Energy was also a big loser as speculation swirled over the group’s takeover saga.

The group’s shares shed 22.5p to 692.5p amid a flurry of reports over which the suitors were left in the acquisition race and bids being prepared at the lower end of analyst expectations.

With oil trading above the US$124 mark, oil giants Royal Dutch Shell and Cairn Energy were among the small group of firms in positive territory. Cairn added 11p to 3353p, and Shell rose 1p to 2037p.

In the second tier, entertainment retailer HMV went into reverse after initial gains following an upbeat trading statement.

Shares were down more than 3%, or 4.75p, at 144.5p.

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