FTSE tumbles on weaker commodity prices and nerves over Ireland’s rescue

BRITAIN’S top share index ended sharply lower yesterday, seeing two months of gains wiped out, as heavyweight commodity issues dropped back with weaker metal prices and financial firms dropped on worries over the Eurozone.

The FTSE 100 index dropped 117.75 points, or 2.1 per cent, to close at 5,550.95, the day’s low, having reversed from a session peak of 5,722.7.

The UK blue chip index ended below the 5,600 level for the first time since 1 October, just holding above that month's opening level of 5,548.62.

“A monthly closing price reversal top could be a bearish sign that this market is getting ready to roll-over to the downside, with 5,483 to 5,385 the next likely major downside target,” said James A Hyerczyk, an analyst at Autochartist.

“A failure to hold the last swing bottom at 5,566 sets up this market for a further acceleration to the downside.”

Energy issues were the biggest blue-chip sector fallers, although the crude price held firm, with BG Group down 3.2 per cent and Royal Dutch Shell off 2.2 per cent.

BP fell 1.8 per cent. The firm has agreed to sell its stake in Argentina-based oil and gas group Pan American Energy to Bridas for $7bn.

Oil services firm Petrofac was the top blue-chip faller, down 5.8 per cent, squeezed lower after a rally, with analysts raising strategic concerns over a deal in Nigeria.

Oil explorer Cairn Energy shed 4.4 per cent, while metals firm Vedanta Resources lost 3.1 per cent.
India’s oil secretary said yesterday a decision on Cairn’s application to transfer majority stakes in its Indian assets to Vedanta will be taken before the end of February.