Footsie in the red

The London market closed in the red today dragged down by heavily-weighted oil stocks following a mixed session in the City.

The FTSE 100 Index slipped almost 40 points earlier in the day, but a positive start to trading on Wall Street eased the fall and the index closed just 12.6 points down at 5902.6 points.

Royal Dutch Shell lost 20p to 1947p and BP 3p to 616p as oil prices steadied at 72.50 US dollars.

Holiday Inn and Crowne Plaza operator InterContinental Hotels posted a 30% rise in profits and pledged a windfall for shareholders as part of its hotel disposal scheme. But shares fell 1% – 6p to 898p – amid disappointment at the absence of further details about forthcoming share buy-backs.

Lloyds TSB shares rose 1p to 523p as investors took a punt on renewed speculation about a bid for the UK’s fifth largest banking group.

The latest market rumours suggested Bank of America could be a possible suitor.

HSBC gained 2p to 947p, Barclays was flat at 649.5p and HBOS lost 0.5p to 996p.

Housebuilding giant Persimmon offered some guidance on the property market after announcing a 16% rise in half-year profits and adding that it had not seen any impact from this month’s rate rise by the Bank of England.

Shares in the blue-chip company were up 16p at one point, but closed 16p lower at 1260p.

The about-turn was matched by a number of second-tier rivals. Taylor Woodrow and George Wimpey both fell following earlier gains – down 1.75p and 2p to 340.25p and 481.75p respectively.

Miners continued their recent progress, with Antofagasta up 2.25p at 438p and BHP Billiton ahead by 6p at 1056p.

UK Coal lost 5% – 10.75p to 207.25p – after property and investment firm Peel Holdings denied press speculation it intends to make an offer.

And niche magazine publisher Future fell 7% or 2.25p to 31p after it issued a profits warning after sales of its car and gaming titles declined in the face of stiff competition.

In the second-tier, Matalan shares initially rose 1% but closed flat at 172.25p, after it emerged founder John Hargreaves was working on a possible 200p a share offer for the company. He has also been given an extra month to table his offer. Mr Hargreaves, who already has control over the company as his family own 53% of shares, has until October 11 to finalise his plans.

And engineering group Bodycote International fell 5% in the wake of interim results. While the figures were in line with expectations, one broker took the opportunity to cut its rating on the stock, which fell 11.5p to 237p.

The day’s biggest risers were British Airways up 5.25p to 399.25p, Royal & Sun Alliance up 1.75p to 134.25p, British Land up 17p to 1362p and Legal & General up 1.5p to 127.75p.

The day’s biggest blue chip fallers were BAE Systems off 9.25p at 356.25p, Hanson down 14.5p to 669p, Drax off 18p to 902p and Centrica down 5.25p to 290.75p.