Media losses and oil prices send FTSE down

Losses by media stocks and record oil prices sent the London market into the red today.

Although the FTSE 100 Index recovered from a 52 point fall earlier in the session, it closed 21.6 points lower at 4408.1.

The slump came as continuing concerns about threats to supplies in Russia and Iraq pushed the price of a barrel of light crude in New York to a new record.

Rising oil prices also had a negative effect on the Dow Jones Industrial Average, which was 30 points lower by closing time in London.

Among those suffering from fears over higher costs was British Airways, which fell 4.25p to 224.75p, while chemicals group ICI was down 2p at 228.75p.

Pay-TV company BSkyB led the Footsie fallers with a decline of 19% – off 114p to 488p – after fourth-quarter subscriber numbers fuelled worries about future growth rates.

In particular, the City was concerned about guidance that BSkyB may have to spend more on attracting new customers.

BSkyB’s weakness dragged the rest of the media sector lower, with FT-owner Pearson the fifth heaviest faller after losing 14.5p to 598.5p. ITV fell half a penny to 102.5p and Reuters was 5.75p lower at 315.5p.

Investors went in search of safer havens with the tobacco and utility sectors providing refuge.

Beneficiaries included NationalGrid Transco, which gained 1.5p to 444.5p and Imperial Tobacco, up 5p to 1199p.

The other heavyweight results announcement of the session also failed to catch the City’s imagination as Aviva gave back some of its recent strength to fall 17.5p to 547p.

This was despite posting results showing a 37% rise in half-year operating profits to £1.13bn (€1.4bn).

The rest of the financial sector was under pressure with Abbey National down 2.25p to 575.25p after confirming further progress with its disposal of non-core assets – this time by holding talks to sell its French subsidiary.

Outside the top flight, online bank Egg continued to fall after owner Prudential announced yesterday that it was no longer planning to sell its 79% stake. Egg, which tumbled 28% last night, was down another 5% or 4.75p to 99.25p.

Shares in debt-laden British Energy weakened more than 2% – off 0.5p to 21p – after its chairman rejected calls to revise the terms of a life-saving restructuring agreed last year.

Housebuilder Bellway retreated 2%, down 17p to 713p, despite forecasting a record-breaking set of annual results after profits, sales volumes and its order book hit all-time highs.

A 71% rise in half-year profits from car dealership Pendragon failed to cheer investors. Despite the firm saying it had benefited from its business-transforming takeover of rival CD Bramall in March, shares eased 9p to 314p.

The highest climbers in the Footsie today were Barclays up 9.25p to 470p, Royal Bank of Scotland ahead 23p to 1533p, Hays up 1.75p to 124.25p and Tesco ahead 3.25p to 259.5p.

The heaviest fallers were BSkyB down 114p to 488p, BT off 8p to 181p, Sage Group down 5.75p to 163.75p and Aviva off 17.5p to 547p.