FTSE weaker on falling banks, oils

By Jon Hopkins

LONDON (BestGrowthStock) – Britain’s leading share index retreated on Tuesday with a rally by miners more than offset by falls in oils and financials as investors fretted over euro zone debt problems during a choppy session.

The FTSE 100 closed down 22.68 points, or 0.4 percent, at 5,528.27, a level not seen since the middle of September.

The blue chip index recorded its worst monthly performance since June, shedding 2.6 percent after a poor second half in a major reversal from 29-month highs at the start of November.

Banks, seen as among the most vulnerable to continued European debt uncertainty, were the biggest blue-chip fallers on Tuesday.

Barclays came under the most pressure due to its exposure to the Iberian peninsula, losing 2.6 percent after earlier touching a 12-month low.

“It is becoming increasingly apparent that if the contagion effect continues, the European authorities may not have the ammunition available to assuage concerns that the crisis won’t spread to Spain and Italy,” said Michael Hewson, market analyst at CMC Markets.

Other financials also suffered as investors shunned stocks perceived to be riskier, with insurer Standard Life down 3.7 percent and fund manager Schroders off 2.1 percent.

Insurance buy-out specialist Resolution was the top blue chip faller, down 3.8 percent and extending Monday’s decline after JP Morgan Cazenove started coverage with “underweight.”

U.S. blue chips were 0.4 percent lower by London close, also unsettled by European debt concerns, but they rallied off earlier lows after Chicago PMI and U.S. consumer confidence data proved better than expected.

ENERGY DRAIN

Integrated oils were weaker after a roller-coaster session as the crude price fell with a firmer dollar, with BP and Royal Dutch Shell both losing 0.5 percent.

But Cairn Energy bounced back from sharp falls on Monday, up 2.4 percent, as analysts highlighted the recent win of three new exploration licenses for offshore Greenland.

Essar Energy was the top blue chip gainer, up 4.1 percent ahead of the Indian energy firm’s inclusion in the MSCI World index from the close on Thursday.

Weir, up 2.2 percent, also joins the MSCI index.

Miners rallied as copper prices moved higher after recent falls, helped by tight supplies. Rio Tinto and BHP Billiton

both added 0.9 percent.

Gold prices set record highs in euro terms on Tuesday, with African Barrick Gold — which on Monday said it had found more of the metal in Tanzania — gaining 3.4 percent.

And broker comment pushed cruise operator Carnival 2.1 percent higher after an upgrade in rating by Numis.

Technical factors, however, still remained a negative for the FTSE 100 index.

“Since the start of November, the FTSE has been forming a clear downward trend … The level of 5,550 looks key, which it looks to be testing at present, and should it break through this with conviction then you could be looking at 5,250 as a next target,” said Phil Gillett, a trader at Spreadex.

(Editing by David Cowell)

FTSE weaker on falling banks, oils