The London market ended the week on a low note today after investors fretted over insurance stocks and high oil prices.
Royal & Sun Alliance and a string of its rivals led the decline as news of a US lawsuit in the insurance sector caused shares to tumble.
Panic among investors in the stocks contributed to the FTSE 100 Index falling 6.7 points to 4622.7 by the end of the session, moving it further back from last week’s two-year high.
The cost of crude oil also weighed on investors as it hovered close to its recent record price of 55 US dollars a barrel.
However, in New York the Dow Jones Industrial Average offered a degree of support, edging about 13 points higher by closing time in London in a bid to reverse yesterday’s heavy losses.
Back in London, Royal & Sun Alliance topped the list of Footsie fallers as it dropped back more than 2% or 1.75p to 74.5p. It was followed into the red by rivals including Legal & General weakening 2p to 99.25p, Prudential, off 8.5p to 462.25p and Aviva, losing 9p to 546.5p.
The decline came after it emerged the Attorney General was accusing US broker Marsh & McLennan of guiding clients to certain insurers in return for pay-offs.
The major excitement came from outside the top flight, as Manchester United said it had no “definitive proposal” to consider from American sports tycoon Malcolm Glazer.
The club saw its shares soar 8% – up 21p to 285p – after saying it understood talks involving Mr Glazer and United’s largest shareholder, Cubic Expression, had broken down.
Back in the Footsie, the big oil companies were slightly in the red as a result of the volatile crude price, with Shell dropping 0.5p to 420.25p and BP losing 2.5p to 543.5p.
Footsie newcomer Cairn Energy was also in deficit, losing hold of earlier healthy gains to fall 6p to 1491p.
On a desperately slow day for corporate updates, Premier Foods lost 1% or 3.25p to 227.75p after private equity group Hicks, Muse, Tate & Furst sold its remaining 20% stake in the firm. Hicks owned 93% of Premier until a July stock market flotation reduced its holding to a fifth.
Poundstretcher-to-Instore group Brown & Jackson failed to impress investors with news of a 41% fall in half year losses. Shares fell 3.5p to 60.5p.
Headhunting firm Whitehead Mann was on the up, however, after it said its chief executive had quit with immediate effect. The FTSE Smallcap stock gained nearly 4% or 5p to 132.5p.
The biggest risers in the Footsie today were Enterprise Inns up 21.5p to 601.5p, Vodafone rising 2.5p to 136.5p, Rexam up 7.5p to 430.5p and BAE Systems rising 4p to 235.25p.
The heaviest fallers were Royal & Sun Alliance down 1.75p to 74.5p, Bunzl off 8.75p to 416.25p, Legal & General down 2p to 99.25p and Dixons off 3.25p to 168p.