After the Bank of England upped its inflation forecast and the International Energy Agency forecast the fastest rise in global demand for oil since 1988, it was perhaps inevitable that the FTSE 100 index would drop 41.80 to 4,412.90 by the close.
Still, it was entertainment that saw the biggest swings as BSkyB shed 32.5p to 621p after reporting a slowing of new subscriber growth, and the European Commission said the company’s monopoly on showing Premier League matches would end in future.
British Airways fell 10.5p to 253p on continued rising oil prices.
Rolls Royce fell 7p to 215p as the second biggest maker of aircraft jet engines also got caught in investor fears over returns from firms whose business is linked to energy prices.
BAE Systems fell 6p to 193.5p after ABB, one of the biggest European companies doing business in Saudi Arabia pulled staff out of the country citing terrorist fears. SA is one of BAE’s biggest customers.
Royal & Sun Alliance gained 0.5p to 74.25p ahead of quarterly results due out tomorrow morning. Analysts expect a fall in profits compared to the same period last year because the company has continued to sell assets since then.
The FTSE 150 index dropped 32.2 points to 5,969.
The London Stock Exchange has not been harmed by increased selling in recent days, and gained another 12.25p to 367.5p.
Stocks are down sharply in New York currently as US consumers wonder whether they will face a summer of record high oil prices, which alone could add significantly to the inflation rate.
Nearly all 30 Dow Jones Industrial Average index constituents are down, led by Intel, which fell as internet switch maker Cisco reported profits that did not outdo forecasts. The Dow is of by about 130 points to 9,885.
The S&P 500 index is down about 15 points to 1,079, while Nasdaq’s Composite is off by about 46 points to 1,885.IFAonline
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