Tumble in oil price takes toll across market

Market report Perry Gourley

Oil majors dragged the London market lower as the price of oil tumbled amid heightened fears over a global supply glut.

The FTSE 100 index was off 20.4 points to 6,710.13, as Brent crude sunk 1.9 per cent to $44.83 a barrel after a report from Barclays warned global oil demand was down amid lacklustre growth from the global economy. BP dropped 2.6 per cent, or 11.8p, to 440.4p while rival Royal Dutch Shell was also in the red, slipping 2.5 per cent, or 54.5p, to 2,093.5p.

Jasper Lawler, market analyst for CMC Markets, said: “A slide in the price of oil weighed on the oil and gas sector of the stock market in afternoon trading, taking the FTSE 100 from narrow gains to narrow losses.”

Sterling was also under pressure after a report from employers’ body the CBI said business optimism had deteriorated at its fastest pace since January 2009 following the Brexit vote.

The CBI’S Industrial Trends Survey revealed optimism had fallen sharply in the wake of the EU referendum result, while expectations that total new orders will rise are at their lowest level since January 2012.

The biggest risers on the FTSE 100 were 3I Group, up 19.5p to 610.5p, Next, up 133p to 5,005p, and Legal & General, up 4p to 199.4p. The biggest fallers included Randgold Resources, down 300p to 8,550p. NEW YORK: The Dow Jones Industrial Average dropped 77.79 points, or 0.47 per cent, to end at 18,493.06. The Nasdaq Composite Index slid 0.05 per cent, or 2.53 points, to 5,097.63. The S&P 500 Index dipped 6.55 points, or 0.30 per cent, to finsih at 2,168.48. The security systems group said it had won a further contract to supply Bombardier Transportation with its eyetrain systems. Shares in the Edinburgh-based explorer fell after Numis kept its hold rating on the shares but reduced its price target to 210p from 215p.