Sceptical London traders didn’t buy into the Asian rally or chatter about US interest rates staying low today as global growth fears remained.
Asian shares enjoyed their biggest rise in 18 months and comments across the pond from the president of the Boston Federal Reserve, Eric Rosengren, that low rates should stay in place for a “considerable time” should have dragged London out of the red today.
However, investors in the Square Mile remained cautious as concerns persisted about slowing growth, a re-emerging eurozone crisis and Ebola.
The blue-chip index had recovered on Friday after its major sell-off but the rally soon fizzled out.
Investors instead looked to safer havens such as gold which edged closer to a one-month high today as spot gold increased 0.2% to $1240.4 (£769) an ounce.
The FTSE 100 fell 30.69 points to 6279.6 and is down more than 5% this month after hitting a 15-month low last week.
Jonathan Sudaria, a dealer at Capital Spreads, said: “The positive momentum from Friday flagged today. The same storm clouds [that caused] last week’s sell-off still hang over the markets. However, such a steep and rapid move lower seems to have quelled the market’s need to correct itself.
"Quite how markets will react to this week’s data and earnings deluge is another story and, with sentiment so fleeting at the moment, it could quite easily turn on a whim again.”
Oil shares were out of favour again as the oil price slump lingered: oil services engineer Petrofac tumbled 27p to 1033p — bottom of the benchmark index when a trio of analysts cut their price target for the group.
Oil explorer Tullow Oil declined 10p to 524p. Oil giants BG Group and Shell were also hit by the continued weakness in the oil price and fell 21p to 1044p and 40p to 2200p respectively.
Tesco became briefly popular again as some investors decided now could be a time to buy the shares ahead of its delayed results on Thursday — despite further revelations about its £250 million balance sheet black hole over the weekend. It was top of the table, up 2.4% or 4.1p to 178.7p.
Over on the mid-tier table, scandal-hit Afren recovered after news last week that South Atlantic Petroleum (SAPetro), an oil and gas explorer founded by former Nigerian defence minister General Theophilus Danjuma, has become its biggest shareholder. It advanced 2.5p to 100p.
The African oil group last week said its chief executive and chief operating officer had been sacked for gross misconduct in the wake of an independent review.
Small-cap President Energy spurted nearly 80% on news it has found oil in Paraguay. It soared 13.5p to 30.5p.
