Sliding oil stocks once again derailed the London market yesterday as crude prices went into reverse.
Tullow Oil was the biggest faller, down almost 8 per cent amid expectations that it will be relegated from the top flight at a quarterly reshuffle on Wednesday. It followed an early rally in commodity stocks off the back of China’s rate cut over the weekend.
David Madden, market analyst at IG, said: “Natural resource stocks initially jumped on the back of the Chinese rate cut announcement, but anxiety set in as to why Beijing needs to loosen rates in the first place.”
Royal Dutch Shell was down 46p at 2,159.5p, BHP Billiton was 21p lower at 1,595.5p and Tullow fell 30p and 357.3p.
The FTSE 100 Index, which had set another record intra day high during the morning session, finished 6.02 points lower at 6,940.64.
Barclays was on the front foot as shares recovered from weakness seen on Friday to rally by 5.85p to 262.75p ahead of annual results.
Testing services firm Intertek was the biggest riser in the FTSE 100 after it increased its full-year dividend by 6.7 per cent and said it expects growth rates to improve this year, despite tough conditions in the oil and gas sector. Shares added 32p to 2,562p.
Shares in engineering conglomerate Smiths Group improved 15p to 1,170p after a broker’s note from Deutsche Bank said the firm’s recent share price weakness looked to be unwarranted.
It said that although the business has been impacted by management departures and a lack of portfolio activity, it has a record of margin resilience and free cash flow generation.
And Marks & Spencer lifted 5.5p to 510p on news that it is to close five stores in China and shrink its Shanghai head office as part of a strategic shake-up.