A fresh slide in the price of oil piled more pressure on investors today after £36 billion was wiped from blue-chip shares in the previous session.
Brent crude stood at just over 64 US dollars a barrel – a drop of more than 40% on earlier in the year – after a monthly report by industry cartel Opec said demand next year was expected to fall to its lowest level in a decade.
The FTSE 100 Index, which slid 2% on Tuesday, had been in positive territory for much of the session but the oil slump meant the top flight finished 29.4 points lower at 6500 – its lowest level since the start of last month.
Energy stocks dominated the fallers board as exploration firm BG Group dived 26.4p to 872.4p and Royal Dutch Shell eased 56p to 2098.5p.
BP was 6.35p lower at 399.6p as it also outlined plans for a restructuring costing one billion US dollars (£638 million) over the next year.
The company said the move was not related to the oil price slump and pointed out that it stood to benefit from deflation across the industry as a whole.
Expectations that the US Federal Reserve will start raising interest rates next summer are also spooking stock markets, although the pound was slightly higher against the US dollar today after it emerged that Britain’s trade deficit narrowed by more than expected in October.
Helped by the falling price of oil, the deficit in goods and services dipped to a seven-month low of £2 billion from £2.8 billion in September, better than City forecasts for £2.4 billion. Sterling was up against the US dollar at just below 1.57 but down against the euro at 1.26.
The biggest rise in the FTSE 100 came from equipment hire firm Ashtead after the A-Plant and Sunbelt owner posted record second quarter profits of £266 million and said it was on track to beat expectations for the full year.
Shares surged by 9% or 98p to 1175p and have now risen by more than 50% since the start of the year.
A relaunch has also resulted in its JD Williams brand achieving a 30% increase in new customers. Shares surged 23.1p to 350.2p, a rise of 7%.
The biggest FTSE 100 risers were Ashtead up 98p at 1175p, Fresnillo ahead 37p at 770p, Mondi up 30p at 1077p and AstraZeneca ahead at 121.5p at 4683p.
The biggest fallers were Petrofac down 25p at 717p, BG Group off 26.4p at 872.4p, Tullow Oil down 10.8p at 379.5p and Aggreko off 39p at 1450p.
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