Oil giants keep FTSE down

Losses by oil heavyweights and a spate of profit-taking brought the recent rally by the London market to an end today.

Losses by oil heavyweights and a spate of profit-taking brought the recent rally by the London market to an end today.

BP and Royal Dutch Shell both featured among the fallers as the FTSE 100 Index gave up the chance to set a new three-and-a-half-year high, ending the session 25.2 points lower at 5340.7.

The oil firms make up 20% of the top flight and were put on the back foot by the cost of crude slipping below $65 a barrel in trading in New York.

Data in the United States were also supportive, with national stocks of oil shrinking less than traders expected in the wake of Hurricane Katrina.

BP weakened 6.5p to 628p and Shell lost 24p to 1818p, although the sector was pepped up by a 6.25p gain to 512.25p for BG Group.

Clothing retailer Next was another major faller, down 23p to 1462p, after a trader’s downbeat comments on its forthcoming half year results. Other retailers below the waterline were Marks & Spencer – off a penny at 354p – and GUS losing 11p to 919p.

Also on the way down was broadcaster ITV after Morgan Stanley reduced its advertising revenue forecasts for ITV1 despite an upbeat set of half-year results yesterday. ITV slipped 3p to 111.5p.

British Airways saw its stock fall 1.75p to 288p after it hiked its fuel surcharge on long-haul flights for the fifth time in little more than a year today.

Among those reporting results, InterContinental Hotels was in better spirits after reporting operating profits ahead of expectations and saying it would put another batch of hotels up for sale, helping the stock add 3.5p to 735p.

Rentokil Initial also attracted buying interest, up 0.75p at 164p, as Sir Gerry Robinson went public with his takeover plans.

However, the outlook was also bleak for some smaller stocks updating the market, with furniture retailer MFI dropping 4% after it said orders at its core chain slumped 15% over the past three months.

Tougher market conditions were blamed for the deterioration since the end of its first half, causing shares to weaken 4.75p to 114.5p.

Holiday park operator Parkdean Holidays slumped 12.5p to 219.5p after saying poor summer trading had cast a shadow over its annual results.

But transport group Arriva was in positive territory after posting improved profits from its UK bus operation. Shares ticked up 3p to 575p.

Virgin Radio-to-Grampian TV owner SMG was also ahead, lifting nearly 2% or 1.5p to 96p after an upbeat trading update. The group said it was standing up well to weaker markets as it posted a 68% rise in half-year underlying profits.

The biggest Footsie risers were Amvescap up 10p at 377.5p, ICI ahead 6.75p at 303.5p, William Hill up 10.5p at 594.5p and Exel ahead 16.5p at 1206.5p.

The biggest fallers were Hanson down 16p at 592.5p, ITV off 3p at 111.5p, Kingfisher down 4.25p at 245.75p and Next off 23p at 1462p.

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