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London open: Stocks decline as oil prices fall again
UK stocks declined on Monday as oil prices slid, reversing Friday’s recovery.
Brent crude fell 4.07% to $30.92 per barrel and West Texas Intermediate dropped 3.7% to $31.03 per barrel at 0905 GMT.
“As it is we’ve probably seen one of the worst ever starts to a trading year, driven primarily by concerns around plunging oil prices, disappointing earnings, and slowing global growth, particularly in China and emerging markets,” said Michael Hewson, chief market analyst at CMC Markets.
“With oil prices also slipping to 13 year lows the correlation between the two has been the primary driver for some weeks now, with quite a bit of evidence that oil prices were at peak bearishness, as forward predictions for oil prices got steadily revised lower, on a daily basis.”
On the data front, the German Ifo survey for January came in weaker than expected.
The business climate index fell to 107.3 from 108.6 the previous month and below the 108.4 reading expected by economists.
Meanwhile, the current assessment and expectations indexes also undershot estimates, at 112.5 and 102.4, respectively. Economists had been expecting readings of 112.8 and 104.1.
It will otherwise be a quiet day of economic data releases. This week’s focus is on the Federal Reserve’s interest rate announcement on Wednesday and the Bank of Japans’ policy decision on Friday.
In company news, Kingfisher slumped as it said profits would take a £50m hit in the first year of its five-year transformation programme.
LondonMetric edged lower as it sold the Odeon Multiplex Cinema property in Preston for £10.2m.
Ophir Energy jumped after signing a non-binding head of terms agreement with Schlumberger, which will receive a 40% interest in the company’s Fortuna project in Equatorial Guinea.
Imagination Technologies was a high riser after saying it is reviewing strategic options for its audio products division Pure.
