Libya shockwaves batter FTSE 100

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The FTSE fell 70.7 points to 5944.1 as the Libya crisis sent shockwaves through global markets

UK blue-chips took another hammering as world stocks sunk into the red on concerns over the Libyan crisis.

London’s FTSE 100 Index dropped more than 1% – down 70.7 points to 5944.1 – following hefty falls in Asia.

Hong Kong’s Hang Seng Index tumbled 2% and the Nikkei 225 slumped 1.8% as investors were also hit by Moody’s decision to downgrade the outlook on Japan’s credit rating for the first time in nearly nine years. Traders were expecting Wall Street to follow suit with sharp declines when the US market re-opens after the President’s Day holiday.

Oil prices remained near two-and-a-half-year highs as fears continued to mount over world oil supplies on concerns that Libya’s crude exports of 1 million barrels a day could be affected as foreign oil companies evacuate staff from the country. Brent crude for April delivery hit more than 108 US dollars a barrel and light, sweet crude rose to 96.6 dollars a barrel.

Airline and travel stocks were particularly hard hit on fuel cost worries, with the merged British Airways and Iberia group International Consolidated Airlines down 4% or 9p to 230.6p. Budget rival easyJet fell 12.7p to 364.3p in the FTSE 250 Index.

Tour operators were also under pressure, with Thomson parent TUI Travel down 5.6p to 240.3p and second tier counterpart Thomas Cook falling 7.2p to 190.9p.

Miners were among those hit the most in the sell-off, led by Lonmin and Fresnillo down 37p to 1804p and 31.5p to 1518.5p respectively.

Oil giant BP was also in negative territory despite surging oil prices and news of its second deal in as many days as it revealed plans to sell several assets in the UK. BP shares eased 5.5p to 486.1p.

Property firms were on a shortened list of FTSE 100 share risers as they continued to benefit from Hammerson’s news on Monday of a 11% rise in underlying 2010 profits to £144.5 million. Brent Cross owner Hammerson remained unchanged at 455.2, but Land Securities added 0.8p to 736.3p.

Elsewhere, car dealership group Pendragon rose 1%, ahead 0.25p to 23.75p, after cost cuts helped it more than double annual underlying profits in 2010 to £25.2 million.

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