Oil prices help FTSE fall

Only 13 blue-chip stocks made it into positive territory today as the FTSE 100 Index tumbled on the back of softening oil and copper prices.

Shares in heavyweights Royal Dutch Shell and BP suffered badly after oil prices slumped to their lowest level for nearly six months.

Combined with negative sentiment from across the Atlantic over fears of higher interest rates in the United States, the Footsie closed 67.8 points lower at 5423.2.

Royal Dutch Shell was the heaviest faller among energy stocks after the cost of crude dipped below 56 US dollars a barrel, slipping 44p to 1865p.

Major rival BP joined the sell off – down 7.5p to 634p – while Cairn Energy and BG Group were 5p lower at 1830p and 4.5p lower at 540.5p respectively.

Miners were also affected as analysts talked of a bubble in the copper market, with Anglo American off 54p at 1816p, BHP Billiton down 17.5p at 866.5p, Xstrata 24p lower to 1314p and Rio Tinto off 40p at 2340p. Antofagasta fared slightly better, shedding less than 1% or 12p to 1665p.

Finance stocks were attracting few friends today, with insurers and banks all falling into the red. Worst hit were Royal Sun Alliance, down 3.25p to 113.5p, Standard Chartered, off 34p to 1238p, and Norwich Union owner Aviva, 17p lower at 686.5p.

They were followed down by banks Lloyds TSB, off 7p to 470.5p, Royal Bank of Scotland, down 28p to 1650p, and HSBC, which ended the day 9.5p lower at 926p.

There was also disappointment for catering giant Compass, which shed its huge gains of 8% in the previous session to close 5.75p down at 211p today.

The biggest rise of the session was Daily Mail & General Trust which gained 11% after it surprised the City by announcing it was considering the sale of its regional newspapers arm Northcliffe. Shares were 74.5p higher at 750.5p.

Stronger profits in France compensated for fresh downbeat words on the outlook for B&Q as retail group Kingfisher lifted 2% or 4.75p to 225p.

Broker Charles Stanley was encouraged by the fact that while Kingfisher management ruled out an imminent improvement in the UK market, they did not see forecasts moving lower after today’s figures. The broker said shares were at “something of a price floor”.

Investors gave a lukewarm response to the news that British Airways is to cut 35% of its management by March 2008, sending the carrier up quarter of a penny to 312p. The lower oil price also improved sentiment towards the stock.

Outside the top flight, steel group Corus jumped 7% or 3.5p to 55.75p as it posted third quarter results ahead of expectations and forecast a continued improvement in prices next year.

The biggest blue-chip risers of the day were Daily Mail & General Trust up 74.5p to 750.5p, Kingfisher up 4.75p to 225p, Pearson ahead 9p to 672.5p and Sage Group up 2.25p to 232.25p.

The heaviest fallers were SABMiller down 46p to 1027p, Anglo American off 54p to 1816p, Hammerson down 28p to 955p and Royal & SunAlliance down 3.25p to 113.5p.