Libya turmoil hits London market


The FTSE 100 Index dropped 15 points to 6067 by noon on Monday amid the political crisis in Libya

Political turmoil in Libya has hit investor confidence as the London market slipped into the red.

The FTSE 100 Index dropped 15 points to 6067 by noon on Monday amid violent clashes in the North African state, where leader Muammar Gaddafi’s son Saif al-Islam warned civil war could hit the country.

The crisis pushed the oil price to its highest levels since September 2008, with Brent crude oil jumping to 104.65 US dollars (£64) a barrel.

Traders turned to safer investments such as gold and the US dollar as the crisis unfolded. The greenback rose against both the pound and euro.

With the US markets shut due to the President’s day holiday, traders focused on the unfolding crisis in Libya.

Banks weighed on the market, with Royal Bank of Scotland – due to publish full-year results this week – at the top of the fallers’ board, down nearly 3% or 1.3p at 47.3p. Lloyds Banking Group is not far behind, losing 1.4p at 67.8p, while Barclays dropped 5.4p at 324.1p.

But miners helped offer support, with silver miner Fresnillo up 78p at 1585p, Lonmin ahead 12p at 1865p and BHP Billiton adding 13p at 2404p.

Oil giants surged on the inflated prices, with Tullow Oil 11p dearer at 1387p, BG Group up 2p at 1469p and Essar Energy ahead 6p at 524p.

Investors turned to the safe haven of gold as the crisis in Libya unfolded, pushing prices for the precious metal up to 1,402 US dollars (£864) an ounce. Randgold Resources benefited, adding 160p at 5195p.

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