London fails to make predicted comeback

The London market failed to mount a comeback today after concerns about high oil prices sparked a poor opening on Wall Street.

The FTSE 100 Index registered early gains, but lost ground during the afternoon to close 18.1 points down at 4321.1.

United States Federal Reserve chairman Alan Greenspan is expected to soothe the markets tomorrow by signalling a continuation of the Fed’s steady-as-she-goes interest rate policy.

But nerves were still jangling today over the price of a barrel of US light crude, which stood at just over 41 US dollars a barrel shortly after London’s close.

The Dow Jones Industrial Average reacted negatively, dropping 44 points in early trading in New York.

In London, banking stocks made a positive start to the day as investors greeted the start of the sector’s reporting season with optimism.

However, that dissolved to leave most of the sector’s players in deficit by the end of the session.

The biggest faller was Abbey National, down more than 1% or 5p to 480p, followed by Lloyds TSB, which fell nearly 1% or 3.25p to 391.75p, Barclays declining 3p to 443p and Royal Bank of Scotland losing 6p to 1520p.

Fashion brand Burberry was also faring poorly, despite unveiling a 14% rise in sales over the first three months of its financial year. Shares slipped more than 2% or 8.75p to 390p.

The biggest risers were BAE Systems, up 4p to 218p, Sage Group lifting 2.75p to 170.25p, Dixons increasing 2p to 157.5p and Scottish & Southern Energy advancing 7p to 706p.

Largest losers included Xstrata, down 25p to 753p, Smith & Nephew off 15p to 553p, mm02 retreating 2p to 87.75p and Rio Tinto slipping 31p to 1380p.