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Weak oils pull FTSE lower, below 6,000 level

Published 12/30/2010, 07:04 AM
Updated 12/30/2010, 07:33 AM
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* FTSE 100 index off 0.2 percent

* Oils weak as crude price slips back

* Miners gain as metal prices firm on weaker dollar

By Jon Hopkins

LONDON, Dec 30 (Reuters) - Britain's top share index fell back by midday on Thursday, oscillating around the 6,000 level in thin volumes on the last full trading session of 2010, with falls by energy issues overpowering gains by miners.

At 1148 GMT the FTSE 100 index was down 9.71 points or 0.2 percent at 5,986.65, having lost 0.2 percent on Wednesday.

Trading volume was 8.7 percent of the 90-day moving average.

"Not much activity is expected over the course of the session of course, with many traders eyeing their New Years Eve parties tomorrow rather than any stock picking," said Joshua Raymond, market strategist at City Index.

Weakness in integrated oils was the main drag on blue chip sentiment, with the sector falling back after recent gains as the crude price slipped back below $91 a barrel.

BP and BG Group both fell 0.6 percent.

Miners provided the main underlying prop for blue chips as a weaker dollar helped again to boost metal prices.

Mexican silver miner Fresnillo was the top FTSE 100 riser, up 1.2 percent as the price of the metal hit a 30-year peak.

Record copper prices also helped lift Rio Tinto and BHP Billiton, 0.6 and 0.5 percent higher respectively.

But gold miners Randgold Resources and African Barrick Gold shed 1.7 and 0.8 percent respectively, having posted strong gains in the previous session.

LENDERS MIXED

Banks were mainly higher, with Barclays adding 0.6 percent, while Lloyds Banking Group gained 0.2 percent, rallying after recent falls as worries over euro zone debt exposure ebbed.

But weakness in global lender HSBC, down 0.4 percent, weighed on the sector overall.

Among other financials, hedge fund manager Man Group gained 0.5 percent after reporting solid growth from its flagship AHL fund on Tuesday, up 1.58 percent last week.

Among the mid caps, SIG took on 1.3 percent, after the Financial Times market report noted rumours that Canadian peer IKO Enterprises might be adding to its 5.3 percent stake in the British insulation specialist.

The FTSE 100 index is up 8.4 percent on the month, the strongest December performance since 1987 when it rose 8.5 percent.

The blue chip is up 10.8 percent this year and has gained 25 percent since it touched the year low at the start of July.

"There is every chance that there could be a small correction into the new year as prices normalise with the return of normal market volumes but if the FTSE can retain above the 5,900, there is every chance the rally may continue into the new year," said City Index's Raymond.

House prices in England and Wales fell 0.6 percent during November, leaving them 2.2 percent higher than the same month a year ago, figures from the Land Registry showed on Thursday.

Investors will have U.S. November pending home sales and the latest weekly jobless claims data to digest later. (Editing by Jon Loades-Carter)

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