Oil price falls spread gloom in London

London’s top flight shares index dropped deeper into the red as it digested further falls in the oil price and the possible departure of BT’s finance director.
Oil price falls spread gloom in London

The telecoms giant has stepped up the search for a new group finance director after revealing Tony Chanmugam — who first took up his post in 2008 — “may step down later this year”.

The Ftse 100 fell 2.7% or 158.7 points to 5,689.3, meaning the index has now fallen 9% since the start of the year.

Germany’s DAX and the Cac 40 in France were both down more than 3%.

Brent crude fell just under half a US dollar to 33.69 US dollars a barrel.

The pound was slightly down against the US dollar at 1.43, as traders still reacted to last week’s US jobs data which will further strengthen the dollar if a second rates hike follows.

The US Federal Reserve raised rates for the first time in almost a decade in December. Sterling was marginally down against the euro at just under 1.29.

In stocks, BT was down more than 4%, or 21.1p to 454.8p, after it confirmed it had begun the search to replace Mr Chanmugam.

It added: “BT confirms that a search process has commenced to find a successor but that no formal decision has been taken on a replacement or around the potential timing of any change.”

Engine-maker Rolls-Royce saw its shares fall 2.6%, or 13.8p, to 515p amid fears it will slash its dividend for the first time in more than 20 years.

The embattled firm has seen its share price fall as reports speculate it could chop a quarter off 2014’s payout of 23.1p a share.

The City expects the firm to report an annual underlying pre-tax profit that has slumped by 16.5% to £1.35 billion compared with a year ago, after it was hit by defence spending cuts and falling crude prices that have impacted its marine division, which supplies the oil industry.

Gold rising to a six-month high gave uplift to gold miner Randgold Resources, which hailed “one of the best years” in its history despite seeing annual pre-tax profits fall 26% to $260 million (£187 million) compared with a year ago.

Its shares were up 13.2%, or 700p, to 6,000p.

Elsewhere, Tool rental firm Speedy Hire said it had agreed to buy rival OHP as it seeks to expand its presence in the rail market.

Merseyside-based Speedy Hire said it would buy OHP, based in Crewe, for an initial fee of £1.5m, and take on £1.7m in debt. Shares lifted 4%, or 1.5p, to 38.2p.

The biggest risers in the Ftse were Fresnillo up 7.8% or 61.5p to 849.5p, InMarsat up 7% or 71.5p to 948.5p, Anglo American up 3.5% or 12.7p to 376.1p and Randgold Resources up 13.2% or 700p to 6,000p.

The biggest fallers were Worldpay down 8.6% or 26.2p to 275.6p, Berkeley Group down 7% or 261p to 3,129p, IAG down 6.1% or 31p to 475.3p and Ashtead Group down 7% or 68p to 828p.

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