Market report: Monday close

A LATE surge in oil prices dashed hopes of a positive start to the trading week in London.

The FTSE 100 Index advanced more than 34 points in the first two hours of trading, but saw its gains slowly eroded until it closed the session 2.5 points lower at 4428.9.

News that Saudi Arabia was preparing to raise its supplies to over 9m barrels a day in June to satisfy customer demand boosted sentiment.

But negative noises from other members of oil cartel Opec over possible production rises helped to shackle the optimism.

Wall Street suffered a similar turnaround, with the Dow Jones Industrial Average sliding into the red after racking up gains of 40 points earlier in the day.

Analysts said a busy day for corporate news in London tomorrow could revive investor confidence.

Geoff Langham, head of trading at deal4free.com, said: 'With the London index once again entrenched in the region of 4440, traders are now looking to the Vodafone results due tomorrow to see if these can lift the Footsie clear of its current levels.'

Chemicals group ICI had flirted with the top of the risers board, but switched into reverse gear once oil prices began to rise, finishing 1.5p lower at 203p.

Oil giants Shell and BP fared better, up 1.5p and 3.5p to 393.5p and 482.25p respectively.

An announcement from Shell that it was lowering its reserves by a further 120m barrels failed to have a negative impact on the group's share price.

Shares in British Airways were squeezed by rising oil prices and its offer of a package of ticket discounts on long-haul flights. Investors worried about the likely erosion to margins as the stock fell 2.25p to 252.5p.

Brewing giant SABMiller was toasting an 6.5p rise to 673p after formally launching its offer to take over the Harbin Brewery Group - the fourth-largest brewer in China.

Among companies reporting today, fashion brand Burberry added 5.5p to 375.5p after saying a 'terrific' year for the group had been helped by a strong performance by its womenswear division.

Fellow FTSE 250 stock leisure firm De Vere was also on the rise - up 1.75p to 436.75p - as a major investor upped its bid for a larger stake in the group.

But music group EMI lost 12% or 30p to 217p following a strong run for shares ahead of its full-year results, which were in line with market expectations.

Investors also failed to cheer an overhaul of the dessert-making division of convenience foods group Uniq, which weakened 3.5p to 170p. Two UK factories are threatened with closure in the shake-up.

And difficult trading at its department stores clouded news of a 22% hike in annual profits at Merchant Retail today.

Shares in the retailer, which also owns The Perfume Shop, slipped 6% or 10p to 159.5p.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in