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The FTSE 100 has fallen, weighed down by energy stocks and economic problems in the eurozone.

FTSE falls as oil price and eurozone woes weigh

The UK blue-chip index has shed 12 points, or 0.2% to 6,477, with oil-related stocks the biggest fallers after a fresh drop in the oil price prompted by top exporter Saudi Arabia cutting the prices it charges to the US.

Oil-related stocks were the worst performers on the UK blue-chip index, which was trading 19 points, or 0.3%, lower at 6,469. Tullow Oil (TLW) fell 3% to 468.6p, Petrofac (PFC) dropped 2.5% to £10.53, Shell (RDSb) was trading 2.4% lower at £22.28, while BG Group (BG) shed 1.9% to £10.16 and BP (BP) fell 1.7% to 436.1p. Aggreko (AGGK), which provides power generators to the oil and gas industry, fell 3% to £14.76.

The price of Brent crude, which has this year fallen to its lowest level in four years, headed further south as Saudi Arabia cut prices for US markets, despite raising them for Asia and Europe. Crude is trading 3% lower at 82.3p today.

Eurozone woes also weighed on investors, after the European Commission cut its growth forecasts for the region. In its autumn estimates, the commission said the eurozone economy would expand 0.8% this year, 1.1% in the next and 1.7% in 2016 - a growth level that had previously been anticipated for 2015.

Imperial Tobacco (IMT) meanwhile rose up the FTSE 100 leaderboard, jumping 3% to £27.47 and lifting rival British American Tobacco (BATS) - up 1.5% at £35.61 - as a pledge to hike its dividend 10% offset lower revenues and profits.

Legal & General (LGEN) rose 2% to 235.3p as the insurer generated 12% more cash in the first nine months of 2014 than a year ago, with strong sales of corporate annuities offsetting its individual annuity business, hit by the Budget pension changes.

The latest data on construction activity meanwhile pointed to a cooling UK economy. Purchasing managers' index (PMI) figures for the sector came in at 61.4 in October, down from 64.2 in September and a five-month low. Any reading above 50 indicates expansion.

With both manufacturing and construction activity down on levels seen at the start of the year, tomorrow's services PMI figure will be closely watched.

'Moderating growth in the construction sector, together with signs that ongoing eurozone woes are hitting UK manufacturing exports, resulting in a downshifting of growth in the good producing sector, clearly adds to the case for the Bank of England to restrain from hiking interest rates until the full extent of the slowdown becomes apparent,' said Chris Williamson, chief economist at Markit, the financial analysis company.

Greene King (GNK) was the biggest 'mid cap' faller, down 4.5% at 772p, after the brewer and pub owner agreed to buy Spirit Pub Company (SPRTC) for £773.6 million.

Shares in 'small cap' stock TT Electronics (TTG) crashed 30.7% to 112.7p after the company issued a profit warning.

Investors in Japan continued to cheer the country's unleashing of more quantitative easing, sending the Nikkei 225 index 2.7% higher in the first day's trading since Friday's 4.8% rise when the measures were announced. Japanese-focused investment trust Aberdeen Japan (AJIT) rose 2.2% to 410p while Baillie Gifford Japan (BGFD) traded 0.9% higher at 368.1p.

Published on:
November 4, 2014
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