FTSE continues to slide as oil hits $53

The London market slipped back into reverse gear today as sky-high oil prices and losses by pharmaceutical companies took their toll.

Despite hitting a new two-year high in early trading, the FTSE 100 Index slipped back below the key 4700 barrier to close 7.6 points lower at 4698.7.

The cost of a barrel of US light crude in New York hit $53 for the first time, contributing to the downbeat mood.

Traders said that with little corporate news to drive shares higher, many investors spent the session taking profits.

The losses mirrored the situation across the Atlantic, where the Dow Jones Industrial Average stood around 70 points lower by closing time in London.

In London, pharmaceutical companies took the top three spots on the Footsie fallers board as investors continued to express disappointment over a trading update from AstraZeneca yesterday.

GlaxoSmithKline was the heaviest faller, retreating 48p to 1151p, followed by AstraZeneca, off 55p to 2159p, and Shire Pharmaceuticals, down 13p to 512.5p.

Oil giant Shell was boosted by the continued surge in oil prices, up a penny to 422.25p, although rival BP weakened 2p to 554.5p.

There was little in the way of corporate news to generate buying interest, although Moss Bros did catch the eye in the FTSE 250 Index after posting profits at the half-year stage for the first time in five years.

Sales in the opening weeks of the second half were also strong, forcing Moss Bros shares up by nearly 5% or 4p to 89.5p.

Shares in discount clothing retailer Matalan soared 6% to their highest level in nearly a year amid speculation Tesco or Wal-Mart could make a bid. The stock lifted 13p to 239.75p, although all three companies refused to comment.

JJB Sports, which recently confirmed it had received a takeover approach, also advanced 6% – up 14.75p to 251.25p.

Airports operator TBI added 2p to 69p after saying low cost airlines had led passenger growth at its airports as it announced first half trading in line with expectations.

But shares in low-cost airline easyJet dipped, down 0.25p to 126p, even though it said a major overhaul of its network helped passengers numbers to rise by 25% in September.

Consumer magazine publisher Future Network was also off – down half a penny to 56.5p – despite reporting signs of an upturn in its market following satisfactory full year trading.

Garden centre operator Blooms of Bressingham was unchanged at 37.5p after saying some of the poorest weather in years helped dampen first half sales.

And Ofex, a trading facility for smaller companies, also ended the session unchanged at 7.75p after saying it had received takeover interest from more than one party.

The biggest risers in the Footsie today were BSkyB up 18.25p to 510p, Sage rising 5.25p to 177.25p, Antofagasta up 31p to 1170p and WPP rising 11.5p to 546p.

The heaviest fallers were GlaxoSmithKline down 48p to 1151p, AstraZeneca off 55p to 2159p, Shire Pharmaceuticals down 13p to 512.5p and Reckitt Benckiser off 31p to 1338p.