Libya violence hits markets
Escalating violence in Libya sent London’s FTSE 100 Index into the red today and pushed oil prices up to two-and-a-half-year highs.
With the US markets shut due to the President’s day holiday, traders focused on the unfolding crisis in Libya, where leader Muammar Gaddafi’s son Saif al-Islam warned civil war could hit the country.
The Footsie fell 45.8 points to 6037.3 and the political unrest saw oil prices leap to their highest since September 2008, with Brent crude oil jumping to $104.65 a barrel.
Investors turned to safer investments such as gold and the US dollar as the crisis unfolded. The greenback rose against both the pound and euro.
Banks weighed on the market as they eased back from recent gains, with Royal Bank of Scotland and Lloyds Banking Group – due to publish full-year results on Thursday and Friday respectively – at the top of the fallers’ board.
RBS dropped 4% or 1.8p to 46.7p, while Lloyds lost 2.3p at 67p as it also took a £500m (€593m) charge after reaching a deal with the Financial Services Authority for compensation after confusing some mortgage customers over terms of their loans.
Barclays was also down, by 6.5p at 323p and HSBC off 13.8p to 709.1p. Miners helped offer support, with silver miner Fresnillo up 68p at 1575p.
Oil giants surged on the inflated prices, with Tullow Oil 5.5p dearer at 1381.5p.
However, BP failed to spark gains after announcing a $7.2bn (€5.3bn) deal to tap into the Indian oil and gas market through a tie-up with Reliance Industries.
Investors turned to the safe haven of gold as the crisis in Libya unfolded, pushing prices for the precious metal up to $1402 an ounce. Randgold Resources benefited, adding 182.5p at 5217.5p.
In corporate news, property firm Hammerson moved near the top of the risers’ board after it revealed a recovering UK retail market helped 2010 profits rise 11%.
