Oil-price rise fails to cheer FTSE

The FTSE 100 Index notched its third straight session of losses today as oil heavyweights failed to benefit from the latest rise in crude prices.

Investors showed little interest in BP or Shell despite a barrel of US light crude rising to a new intraday high above 68 US dollars in trading.

With the banking sector also lower in spite of bid speculation lifting the price of Lloyds TSB shares, the FTSE 100 Index closed 19.5 points down at 5255.7.

Oil stocks struggled to attract buyers even though weather reports showed tropical storm Katrina was moving towards the US coastline where many production facilities are based. BP fell 5.5p to 618p and Royal Dutch Shell weakened 5p to 1826p.

The latest rise in the oil price also hurt British Airways which faded 5p to 279.5p.

A day after British Gas owner Centrica found itself in the bid spotlight, Lloyds TSB advanced 4.25p to 458.25p as rumours circulated of interest from US bank Wells Fargo.

But this was the only cheer to be found among any of the blue-chip firms offering financial services, with Barclays losing 0.5p to 555.5p and insurer Prudential off 3p at 503p.

Centrica closed 4% higher last night, but the speculation linking firms such as Norsk Hydro and Gaz de France cooled as shares slipped a penny to 251.75p.

Among companies reporting results, leisure group Hilton lost 1.5p to 304p after revealing underlying pre-tax profits increased to £192.1m (€281.7m) from £191.3m (€280.5m), as a tough first half for Ladbrokes was offset by a better performance from its worldwide hotels chain.

Steel group Corus weakened 1.5p to 44p as it said trading conditions had become tougher as selling prices cooled – overshadowing the payment of a dividend and half-year results showing sharply higher interim profits.

Services group Rentokil Initial managed to hold firm – unchanged at 162.25p - as new chief executive Doug Flynn revealed a 20% fall in half-year profits and said there would be no quick fix to the company’s problems.

Elsewhere, retailers were under pressure amid concerns that a stand-off over Chinese clothing quotas could cause stores to run out of some products. Analysts expressed concern about the impact on Next, which fell 19p to 1509p, and Marks & Spencer, which eased 1.5p to 359.5p.

Outside the top flight, book chain Ottakar’s lifted more than 7% or 24.5p to 367.5p after HMV said it was in the early stages of discussing a bid that could rival the plans of the founder of Ottakar’s and other executives to take the company private. HMV cheered 3p to 252.25p.

The highest Footsie risers today were Tesco lifting 5.75p to 331.5p, BHP Billiton up 12p to 816p, National Grid rising 5p to 525.5p and Lloyds TSB up 4.25p to 458.25p.

The heaviest fallers were Man Group off 34p to 1611p, Cadbury Schweppes down 11p to 546.5p, Amvescap off 6.5p to 363p and British Airways down 5p to 279.5p.