The FTSE 100 index opened down this morning as the price of oil continued to linger around $30 a barrel.
The UK's blue-chip index opened 1.68 per cent down at 5,860 points.
"For the first time this year the FTSE 100 managed to post two positive days in a row yesterday, buoyed by a rebound in oil prices, as well as an improvement in the latest Chinese trade data for December," said Michael Hewson, chief markets analyst at CMC Markets. "Unfortunately the wheels started to come off a little in the afternoon session as the oil price started to slip back, dragging on European markets," which is continuing today.
Of the little good news there was, Tesco led the risers (the few that there were, anyway), up 5.5 per cent to 167p per share. This morning Tesco reported that it beat expectations for the Christmas period.
However, Primark parent Associated British Foods' share price fell this morning, dropping 0.69 per cent to 3,020p after announcing it expected to knock off £25m from its full year profit.
European markets are following the lead of Wall Street, which was driven to its biggest drop in three months yesterday on the falling price of oil.
“The price war within Opec has just taken a turn for the worse… Plus Iranian barrels are about to hit the market and China seems to be in the midst of a swift [Chinese renminbi] depreciation move," the Financial Times reported analysts at Bank of America Merrill Lynch to have said.
“A combination of factors could still drive crude oil prices into a mid-$20s scenario in the very short term given the extremely high inventories.”