FTSE near three-week low as oil's fall drags down energy sector
Reuters
Published Jan 06, 2015 14:12
FTSE near three-week low as oil's fall drags down energy sector
By Atul Prakash and Lionel Laurent
LONDON (Reuters) - Britain's top share index fell close to its three-week low on Tuesday as declining crude oil prices hurt shares exposed to the energy industry.
A survey also showed growth in Britain's dominant services sector declined the most in more than three years in December, another disappointing piece of economic data.
The FTSE 100 index was down 0.4 percent at 1209 GMT, recovering from worse losses earlier but still underperforming the pan-European FTSEurofirst 300 index.
Shares of Ashtead, a UK industrial-equipment-hire company, plunged 6.8 percent. The followed an 11 percent slide for its U.S. rival United Rentals after a broker downgraded it.
Both companies are exposed to the energy industry, analysts say, which is suffering from oil's slide in recent months to 5 1/2-year lows.
The UK FTSE 350 oil equipment and services index was down 0.5 percent, although some oil stocks such as BG Group (LONDON:BG) and BP reversed losses to gain between 0.8 and 1.4 percent.
"It's difficult to be positive on energy shares near-term as oil prices fall, with no clear turnaround catalyst yet visible," said Keith Bowman, an equity analyst at Hargreaves Lansdown.
Also putting pressure on the market is concern over Greece, where a Jan. 25 election might vault the left-wing Syriza party into power. The party threatens to renounce the country's bailout agreement with the European Union, raising the risk of a sovereign default.
"Continuing uncertainty surrounding the upcoming Greek election and the potential fall-out of Greece possibly leaving the euro is spooking investors," said Peregrine & Black senior analyst Markus Huber.
(Editing by Louise Ireland)
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