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FTSE 100 Index down after M&S fall hits market

Published 02/06/2016

The FTSE 100 rose 18.4 points to 6210.3 after losses in the previous two sessions
The FTSE 100 rose 18.4 points to 6210.3 after losses in the previous two sessions

London's top-flight index was flat as under-pressure commodity stocks and a fall from Marks & Spencer dragged on the market.

The FTSE 100 Index was 6.3 points lower at 6185.6 as the oil price struggled for direction after members of the Opec cartel failed to reach an agreement on how to tackle the global supply glut.

Ministers ended the meeting in Vienna without an output policy and remained at odds over the best way to stabilise the market.

In a statement, it said both members and non-Opec producers needed to work together to bring market stability.

Commodity stocks bore the brunt of the shifting oil price, which saw Brent crude drop 1.3%, or 63 cents (43p), to 49.09 US dollars (£34.04) a barrel, before later recovering to 49.87 US dollars (£34.58) a barrel.

Oil major BP was down 0.5p to 353.1p while mining giants Anglo American and Glencore slipped 4.6p to 587.5p and 0.35p to 128.6p respectively.

Jameel Ahmad, chief market analyst at FXTM, said there was "never a chance" Opec would reach an agreement on cutting production.

He added: "There was very little need for Opec to change their strategy today and it is important to point out that the price of oil has rebounded substantially since the milestone lows below 30 US dollars (£20.70) a barrel at the beginning of 2016."

Marks & Spencer, National Grid and Taylor Wimpey dominated the biggest fallers on the market after going ex-dividend, which means new buyers no longer qualified for the latest dividend payment.

Across Europe, Germany's Dax edged up by 0.03% while the Cac 40 in France fell 0.21%.

Sterling regained its poise, up 0.05% against the dollar at 1.441, as it shrugged off a bleak update from the UK construction industry, which recorded its weakest growth for almost three years in May amid "heightened uncertainty" over the EU referendum.

The closely-watched Markit/CIPS construction purchasing managers' index (PMI) showed a reading of 51.2 last month, down from 52 in April. A reading above 50 indicates expansion.

The pound was also up 0.3% against the euro at 1.292.

In stocks, c atalytic converter and chemicals maker Johnson Matthey made gains despite posting a 22% fall in annual pre-tax profits to £386 million.

The group saw bottom-line results hit by a £141 million charge relating to restructuring costs.

Its emissions control division boosted underlying earnings by 16% thanks to a European crackdown on diesel emissions following recent scandals at Volkswagen and Mitsubishi.

Shares rose nearly 6%, or 168p, to 2995p as it also assured over a better performance expected for the new financial year.

A raft of stocks were lower in the top tier as they turned ex-dividend, including Marks & Spencer and National Grid, down 14.3p to 356.6p and 45.9p to 959.6p respectively.

Elsewhere, budget carrier Ryanair was also in focus after notching up another record for passengers last month despite disruption caused by air traffic control strikes in France.

The airline reported a 12% rise in passengers carried in May, to 10.6 million passengers in May and improved its load factor by two percentage points to 94%.

Shares rose initially but later came in flat at 13.96 euro (£10.80).

The biggest risers on the FTSE 100 Index were Johnson Matthey up 168p to 2995p, GKN up 6.3p to 282.5p, Standard Chartered up 11.4p to 533.7p, Barratt Developments up 11.5p to 585p.

The biggest fallers on the FTSE 100 Index were National Grid down 45.9p to 959.6p, Marks & Spencer down 14.3p to 356.6p, Taylor Wimpey down 5.3p to 192.4p, DCC down 80p to 6280p.

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