Despite rumours of a takeover bid for Barclays from Citigroup - which earlier in the day saw its share price climb 11%, the FTSE 100 index has still closed down thanks to worries about profits at BA and Vodafone.
The FTSE 100 index closed down 47.5 points or 1.1% to 4365.9 as there are concerns the rising oil price – which earlier in the day hit an all-time high – will hurt British Airways’ profit potential.
The oil price is currently at around $43.97 per barrel, having earlier in the day hit $44.41, lowering British Airways by 14p or 4.6% to 212.75p.
Imperial Chemical Industries also closed down 5p or 2.2% to 227.25p.
Vodafone also closed down 2.5p or 2.1% to 117.5p after reporting its user numbers in Japan are down for the first time.
Speculation about banking takeovers played a dominant role in keeping the FTSE indices afloat, as Abbey gained 2.5p or 0.4% to 587.5p – on rumours UK banks are lining up to buy instead of Banco Santander.
Barclays eventually closed up 28.25p or 5.5% to 507.75p on rumours of a takeover bid from Citigroup, while its rival Lloyds TSB Group picked up gains in all the activity and advanced 8p or 1.9% to 425p.
In the US, markets are not reacting too well to the rising oil price.
The Dow Jones is currently down 87.98 points or 0.88% to 9,875 and the S&P 500 index is down 9.5 points or 0.88% to 1,071 while lthe Nasdaq Composite index is 22 points or 2.1% lower to 1,799.IFAonline
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