MARKET CLOSE: Markets take a dim view of oil gains

The London Stock Exchange building. Picture: Getty

The London Stock Exchange building. Picture: Getty

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THE recent rally that took the FTSE 100 to new highs looked well and truly over as the index plunged more than 1 per cent.

Markets were dragged down by a variety of factors, including increased fears that Greece will default on its debt obligations and a negative newsflow in the travel sector.

Alastair McCaig, market analyst at IG, said: “European equities have shown the sort of unity the eurozone would love to have by selling off in an equally aggressive style.”

In fact, bourses on the Continent managed to claw back some of their loses towards the close, but the FTSE 100 was down 95.64 points at 6,895.33.

Air strikes by Saudi Arabia and its allies on rebel targets in Yemen triggered fears of disruption to oil supplies in the Middle East, causing the price of Brent crude to lift by 5 per cent to just below $60 a barrel. Oil stocks initially rose but were later also caught up in the broad sell-off as BP fell 2.2p to 446.1p, although oil and gas industry supplier Weir Group added 9p to 1,777p and topped the paltry list of just three risers in the index.

But travel and leisure stocks were on the back foot due to the reversal in the recent trend towards lower fuel costs. Airlines may also have been impacted by the news coming out of the Germanwings crash in the Alps.

EasyJet dropped almost 3 per cent, down 53p to 1,837p, despite a positive trading update from the low-cost carrier. Shares in British Airways owner International Airlines Group also fell 3 per cent – off 20.5p to 587p – and cruise ship operator Carnival dipped 21p to 3,024p.

London Stock Exchange itself led the blue chip fallers after Borse Dubai sold its entire 17 per cent stake in the business, ending a relationship dating back to 2007. Shares dropped nearly 6 per cent, or 143p, to 2,395p.

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