Libya concerns see FTSE slip

Intense fighting in Libya remained top of investors minds' today as stocks fell into the red once more on rising oil prices.

The FTSE 100 Index closed 37.5 points lower at 5937.3, despite forecast-beating results from Prudential and a potential major deal involving Rolls-Royce.

Volatile trading on Wall Street added to the pressure on London stocks, with US investors spooked by Brent crude moving back up to $115 a barrel and US crude for April delivery lifting 0.5% to $105 on the New York Mercantile Exchange.

The pound gained strength as better-than-expected UK trade data gave sterling a boost, while sovereign debt worries also weighed on the euro.

Sterling rose to $1.62 and €1.16.

Prudential topped the risers board after the insurer rebuilt bridges with investors by proposing a 20% hike in its full-year dividend.

A 24% rise in operating profits to £1.94bn (€2.26bn) came in ahead of market expectations as the Pru shook off memories of last year's uproar over its botched attempt at Asian deal-making. Pru shares rose 5% or 35p to 749p.

Rolls-Royce followed not far behind with a rise of 19p to 619.5p after the engineering giant joined forces with Daimler to announce an offer worth €3.2bn for German industrial engines maker Tognum.

Rolls said the proposed transaction bolstered its position in a global market worth more than 30 billion euros a year.

Commodity-based stocks were under pressure for a second successive session following yesterday's disappointment over results from Antofagasta. Industry powerhouse BHP Billiton dropped 60p to 2383p, while in the oil sector BP dropped 8.8p to 485.1p and Royal Dutch Shell slipped 35p to 2133.5p.

Investors were also focused on the retail sector after John Lewis announced a 20% rise in full-year profits and said gross sales for the first five weeks of the new financial year were up 6.5%.

This received a mixed reaction from other major players in the sector, with Marks & Spencer up 2.4p to 340.9p and Next losing early session gains to stand 14p lower at 1920p.

Shares in Tullow Oil fell 47p to 1413p despite full-year results showing pre-tax profits jumped to $152m (€109.34m) in 2010. While revenues were ahead of expectations, analysts expressed concern at the impact of higher costs.

In another busy session for corporate results, shares in Restaurant Group jumped 9% after the owner of Frankie & Benny's and Chiquito reported a 12% rise in full-year profits and said new year sales had bounced back after the snow chaos.

Shares responded with a gain of 26.3p to 306.1p.

The biggest Footsie risers were Prudential up 35p at 749p, Imperial Tobacco up 66p at 1978p, Randgold Resources ahead 149p to 4629p and Rolls-Royce up 19p to 619.5p.

The biggest Footsie fallers were Tullow Oil down 47p to 1413p, British American Tobacco off 70.5p to 2436.5p, Standard Chartered down 45p to 1635p and Arm Holdings down 15.5p to 574p.