FTSE back on the decline

Sky-high oil prices were weighing on investors today and prevented the London market continuing this week’s upward trend.

The FTSE 100 Index retreated 19.0 points to 4340.2 by mid-morning, despite climbing more than 50 points in the previous two sessions.

With the cost of a barrel of crude breaking through the $47 (€38.10) mark in New York for the first time in its 21-year history, traders were finding little positive momentum.

One trader said oil prices would continue to take centre stage in the next few days, given the relatively small amount of economic and corporate news due for release.

Buoyant results from mining giant BHP Billiton failed to lift the top flight, as some investors expressed disappointment that the performance – showing a 78% rise in profits – was not stronger.

Shares slipped 1% or 7.25p to 516.75p and dragged a clutch of rivals lower with Anglo American down 19p at 1237p and Rio Tinto off 17p at 1372p.

The higher oil price added to the pressure on British Airways, which is already facing the threat of industrial action later this month. Shares slipped 5p to 216.25p.

The cost of crude also had a negative impact on oil giant BP, which weakened 3p to 487.5p, although rival Shell remained unchanged at 393.5p.

The biggest faller in the top flight was services group Rentokil Initial after the Financial Times said the company may stop short of breaking itself up when details of an internal review are announced later this week. Shares fell more than 3% or 5p to 152p.

Elsewhere, football club Manchester United was a heavy faller, slipping 4% or 10.75p to 243p.

But broker Collins Stewart climbed 5% or 18p to 364.5p after the Financial Services Authority cleared it of allegations of market abuse.