Losses from unrest in Middle East limited by advancing oil sector

FTSE: 5,862.94 (–18.43) Mid-250: 11,471.51 (–74.51) Small Cap: 3,257.98 (–10.65):WORRIES OVER the impact of the political unrest in Egypt saw Britain's top share index fall yesterday, but losses were limited by gains from heavyweight energy issues as the crude price firmed.

At the close the FTSE 100 index was 18.43 points, or 0.3 per cent lower, at 5,862.94, having shed 1.4 per cent on Friday when worries over the situation in Egypt intensified. Protesters further stepped up their campaign yesterday to force Egypt’s President Hosni Mubarak to quit.

Travel firms were big fallers, with traders citing worries over the disruption caused by the protests in Egypt and the impact of a strong crude price.

Tour operator TUI Travel shed 2.6 per cent, with mid-cap peer Thomas Cook down 3.1 per cent, and International Consolidated Airlines Group losing 1.8 per cent.

Risk-sensitive banks were a drag on the blue chips as investors remained nervous about the global picture. However, RBS was the top blue chip gainer, adding 5 per cent, rallying after sharp falls on Friday as it said it has suspended drilling in Egypt but gas production remained normal.

Traders highlighted the greater impact of BG’s recent new oil discovery in the Santos Basin off Brazil.

“BG Group remains a dark horse among leading FTSE 100 oil and gas explorers even though the ongoing exploration developments in the massive Santos Basin should be uppermost on traders’ radar,” said Andrew Gibson, head of research at Galvan.

BP bucked the firmer oil sector trend, shedding 0.4 per cent, ahead of its fourth-quarter results due today.

There were concerns over BP’s dividend as Russian shareholders in its TNK joint venture convened to consider withholding a $1.8 billion payment.

Miners rallied led by Xstrata, up 2.2 per cent, excited by merger activity among US coal miners.Massey Energy agreed to a $7 billion takeover offer from Alpha Natural Resources.

US blue chips were 0.2 per cent higher by London’s close as merger activity and solid earnings from Exxon Mobil helped offset concerns about the unrest in Egypt.

Among individual gainers in London, Rexam added 2.1 per cent after the can-maker signed a contract in North America and a long-term deal with its largest customer in Brazil. – (Reuters)