Now bird flu ruffles Footsie's feathers

THE UK's leading shares were mired in the red again this morning after oil majors BP and Royal Dutch Shell fell on easing crude prices and as fears of possible human-to-human transmission of bird flu in Indonesia rattled sentiment.

"There is a loss of confidence in these markets. It's a combination of weakness in the dollar and concerns that some company forecasts might not be met," said one trader. "The fact that markets have not been able to hold on to higher levels reflects the nervousness."

Britain's benchmark FTSE 100 index notched up its biggest daily gain in more than three years yesterday.

But, in late morning trade today, it was down some 75 points at 5603, see-sawing as miners recovered briefly, only to fall back again. Earlier the index had pared losses to trade at a session high of 5678.7.

Adding to fears of rising global interest rates were concerns over the possible spread of bird flu between humans after the World Health Organisation said an Indonesian who died of bird flu after nursing his sick son may have caught the virus in a case of direct human-to-human transmission.

Dealers said the reaction to bird-flu fears showed how vulnerable the market was to any shock. "It's all excuses, people are twitchy for no good reason at all," said one dealer.

The oil sector was the weakest, accounting for around a third of the Footsie's loss.

However, shares in retail and financial information group GUS stood out among the gainers, adding 1.9 per cent after it detailed plans for its demerger in October.

Shares in UK insurer Friends Provident managed to stave off the downward pressure, trading little changed as bid talk in the stock failed to die down. Some traders mentioned speculation that Dutch rival Aegon was interested in the company, although, on Monday, Aegon UK head Otto Thoresen said he saw the British business growing organically.