Britain's top share index surrendered its earlier gains and ended lower on Monday, with commodity shares coming under severe pressure after prices of crude oil and metals slipped. The UK Oil and Gas and the mining indexes fell 4.0 percent and 1.7 percent respectively after crude oil prices hit their lowest in nearly seven years following an Opec meeting that ended in disagreement over production cuts and as metals prices fell on a stronger dollar.
Shares in Royal Dutch Shell, BG Group, BP, BHP Billiton and Antofagasta fell by between 2.8 percent and 4.7 percent. "Opec seems to be fragmenting now, with an air of 'every member for itself' prevailing," said Mike van Dulken, head of research at Accendo Markets. "Without the protection of big producers like Saudi Arabia, smaller exporters will have little choice but to ramp up production, even if to do so would be counter-productive for the oil price."
The bluechip FTSE 100 index closed 0.2 percent lower at 6,223.52 points after hitting a high of 6,287.23 points earlier in the day. It shed 2.8 percent in the last two sessions of last week, which took the index to its lowest level since mid-November. The index posted its biggest loss since September 28 on Thursday after European Central Bank President Mario Draghi announced stimulus measures that fell short of what markets had expected. Traders said the FTSE 100 index might hover within a recent 200 point range, with investors staying cautious before a long-awaited US Federal Reserve meeting next week.
"The ECB did what the markets wanted, but they didn't do half as much as the markets wanted ... (and now) we're in a little bit of a no-man's land, waiting for the Fed's decision," said Alastair McCaig, market analyst at IG. Among mid-caps, Entertainment One Ltd slumped 15 percent after Canaccord Genuity cut its target price for the stock to 284 pence from 323 pence and N+1 Singer lowered its target price to 181 pence from 185 pence. British outsourcing company Serco fell 4.4 percent after warning that revenue and trading profit would fall in 2016 due to the sale of a call centre business and some lost contracts.
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