FRIDAY MARKET CLOSE: Consumer stocks cheer cheaper oil

The London market was pulled in opposite directions as traders adjusted to the prospect of cheaper oil in the medium term.

EasyJet gained 20p to 1,653p. Picture: Neil Hanna

After the lift given to airlines in the previous session, the good cheer spread to the wider consumer sector at the prospect of lower petrol prices boosting margins and giving people more money to spend.

Sports Direct International was up 16.5p to 660.5p, Marks & Spencer was 6.5p higher at 488.5p and Primark owner Associated British Foods climbed 35p to 3,203p.

Chris Beauchamp, market Analyst at IG, said: “Clearly firms with a focus on consumer spending will be indirect beneficiaries of increased spending thanks to lower petrol prices, but the good done in this way is going to be cancelled out by the baleful impact on earnings in the raw material and energy sectors.

“The net result may well be that the UK’s leading index is about to enter a period of stagnation, being left behind by its European and American cousins.”

BP was down 6p to 420.2p while Royal Dutch Shell drifted 42.5p to 2,223p. Oil and gas exploration firm BG was the biggest faller, down 9 per cent, or 86.5p, to 900.2p, while rival Tullow Oil dropped 38.9p, or 8 per cent to 426p. Down the supply line, Weir Group was off more than 4 per cent or 84p at 1,876p.

But cruise ship operator Carnival was buoyed almost 5 per cent, or 123p, to 2,820p, while Tui Travel rose 11.4p to 444.7p.

Meanwhile, EasyJet gained 20p to 1,653p but British Airways owner IAG, a riser in the previous session, failed to make any further gains, instead edging 0.3p lower to 457.5p.

Analysts calculated that airlines who have already taken positions on oil for years ahead may have to wait to see benefits from the oil price drop.

Having been down by as much as 50 points at one stage, the FTSE 100 Index closed just 0.8 points lower at 6,722.62.