Equities quieter as oil prices increase

Global equities reined back activity yesterday after the white-knuckle ride of some recent sessions, as markets awaited a clearer picture of the US-led alliance's military campaign in Iraq.

Oil markets remained in focus, however, as prices recouped some of Tuesday's losses, triggered by what was said to have been a limited civilian uprising against Iraqi forces in the southern Iraqi oil town of Basra.

Supply worries have been exacerbated by continuing disruptions in Nigeria, where ethnic clashes cut more than 800,000 barrels a day from the country's normal production of 2.2 million barrels.

But late yesterday, Brent crude prices came off earlier highs on reports that some groups in Nigeria had agreed to halt their production blockade.

May Brent crude futures pulled back from a high of $25.80 to trade up 49 cents at $25.30.

In the US, stocks slipped in a see-saw session as investors sifted market speculation for clues to the progress of the war in Iraq.

The Dow Jones Industrial Average initially fell more than 1 per cent after reports that a large convoy of Iraqi military vehicles, believed to be loaded with elite Republican Guard troops, had left Baghdad and was headed toward the US Army's 3rd Infantry Division.

Traders said rumours that New York was putting the city under a terror alert also pressured the market.

But officials quickly knocked down those rumours and the market recouped some losses.

Later, the Dow eased 50.14 points, or 0.61 per cent, to 8,230.09.

The broader Standard and Poor's 500 edged down 4.81 points, or 0.55 per cent, to 869.93. The technology-led Nasdaq fell 3.54 points, or 0.25 per cent, to 1387,47.

In Dublin, a strong performance from the financial sector drove the market up by 1.42 per cent yesterday, with the main Irish names winning back much of Tuesday's losses.

Elsewhere, European markets were flat, floundering in the absence of a lead from Wall Street.

In London, the FTSE was up 31.1 points, or 0.8 per cent, at 3793.1, as it shrugged off modest losses on morning trade on Wall Street.

Frankfurt largely brushed aside a disappointing reading of the IFO economic institute's key business climate index, which analysts said had taken a back seat to events in Iraq.

The institute's business climate index dropped in March after two months of rises that had led to tentative forecasts of an end to stagnation in the economy.