Worries over banks and oil weigh on FTSE

Nervousness over oil supply as violent crackdowns on protests in Libya continued combined with worries over banks’ liquidity to keep the FTSE in the red today.

The FTSE 100 declined from about 9:00am and it finished 1.12 per cent down at 6,014.8.

“Only a handful of blue-chips registered a positive change for the day – and unsurprisingly, some of the commodity and defensive stocks caught the eye of investors as the uncertainty continues,” said David Jones, chief market strategist at IG Index.

Randgold Resources topped the risers, up 3.97 per cent at 5,235p at the close, while Fresnillo was up 2.85 per cent at 1,550p and Essar Energy finished up 0.68 per cent at 521.5p.

“Randgold Resources is top gainer as the price of gold has pushed back up above $1400 (£861),” said Jones.

Engineering firm Invensys closed up 3.71 per cent at 357.8p after reports over the weekend linked it to takeover bids from candidates including Switzerland’s ABB, France’s Alstom and Germany’s Siemens.

Real estate group Hammerson finished up 1.72 per cent at 455.2p after reporting rising profits as demand for London offices rose and occupancy rates recovered.

But the limited gains were outweighed by losses among the FTSE’s biggest financial stocks as the European Central Bank published figures showing that overnight loans granted to banks that urgently needed liquidity spiked to their highest level in more than 19 months on Wednesday and rose even higher last Thursday.

Lloyds Banking Group led the fallers, closing down 3.97 per cent to 66.55p and Royal Bank of Scotland down 3.89 to 46.64p although other banks also lost ground such as HSBC, closing down 2.55 per cent at 704.4p.

Lloyds was also hit by its announcement that Halifax is to take a £500m charge to cover compensation costs to customers from poorly-worded mortgage agreements.

Cruise operator Carnival dropped 3.41 per cent to 2,808p and BA parent International Consolidated Airlines Group lost 2.84 per cent to 239.50p as fears over oil supply hit fuel-hungry firms.

In the FTSE 250, miner Centamin Egypt led the risers, up 5.81 per cent at 129.30p as investors took advantage of the restoration of order to recoup losses from the recent unrest.

Sausage skin manufacturer Devro also gained more than five per cent, closing up 5.04 per cent at 243.7p after its 2010 results showed a sharp improvement in profits and operating margin as global demand rose.

But Bluetooth chip maker CSR lost most ground, down 9.68 per cent to close at 392p after investors rejected its announcement of a $680m merger with US rival Zoran, and a share buyback.

US markets were closed for a public holiday.