Oil and mining shares drag FTSE lower as commodity price falls take their toll

BRITAIN’S leading shares shed 0.3 per cent yesterday as oils and miners fell back on lower commodity prices, while banks moved lower on investor caution ahead of first-quarter results in the United States.

At the close, the FTSE 100 was down 15.99 points at 5,761.66, having been stuck in a tight 37 point trading range throughout the session.

Integrated oils were the main fallers on the FTSE 100 index, dropping back as the crude price fell 2 per cent to below $83 a barrel on supply concerns. BP, BG Group, and Royal Dutch Shell shed 0.1 to 1.8 per cent.

Miners were also a big drag on the blue chips as metal prices retreated on the demand outlook, while results from US aluminium group Alcoa, the first of the earnings season, arrived in-line on earnings but light on revenues.

Kazakhmys, Lonmin, Fresnillo, Vedanta Resources, Randgold Resources, Antofagasta, Eurasian Natural Resources and Xstrata fell 1.6 to 3.2 per cent.

“With U.S. earnings now the main focus, and Wall Street retreating, investors are happier to switch from risk and sell down the heavyweight miners, oils and banks,” said Mic Mills, senior trader at ETX Capital.

US blue chips were 0.1 per cent lower by London’s close with investors nervous ahead of the earnings deluge and with rumours Federal Reserve chairman Ben Bernanke might change his guidance language in a Congressional testimony due to be delivered today.

Banks were lower in London as investors trimmed holdings in ahead of the results from their US peers, with Barclays, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group down 0.5 to 1.4 per cent.