Footsie makes shaky start to week

The latest rise in oil prices put pressure on investors today as the FTSE 100 Index fell sharply in a disappointing start to the week.

With the cost of a barrel of oil testing August’s record high of $49.40, the Footsie reached mid-morning 32.4 points lower at 4545.7.

The latest oil price rise, which caused British Airways to fall 1.75p to 207.5p and Rolls-Royce to slip 3p to 245.5p, offset noteworthy developments in the buildings materials sector.

Interest was focused around FTSE 250 Index company RMC after it agreed to a takeover by Mexican rival Cemex.

The move was at a substantial premium to RMC’s share price on Friday night and caused the stock to surge 42% or 253p to 852p. It also had a major impact on top flight building materials group Hanson, which rose 4% or 13.75p to 404p.

Wolseley – the owner of the Hire Center chain – added to the positive mood in the sector by lifting 7p to 932.5p on the back of another set of record results - this time showing profits up 32%.

Among other building materials groups, FTSE 250 Index listed Aggregate Industries gained 4.5p to 93.5p.

Back in the top flight, Sainsbury’s rose another 3.5p to 266.25p after weekend reports said private equity group Permira was considering a bid for the ailing supermarket chain. Rival Tesco followed suit – adding 2.5p to 288.75p.

The Footsie risers board also featured United Utilities after regulator Ofgem improved the level of spending it planned to allow for distribution firms. United rose 4.5p to 549.5p.

Outside the top flight, football club Manchester United fell 2% or 6.25p to 254.75p after warning that lower media revenues would have an impact on future results. In the last financial year, United posted a fall in profits but said operating profits had still been 5.9% higher.