Britain's top stock index retreated after hitting a three-week high earlier in Thursday's session, weighed down by Ashtead and travel stocks hit by rising oil prices. Equipment rentals company Ashtead was the top faller on the bluechip FTSE 100 index, down 7.8 percent after US peer United Rentals reported an underwhelming set of fourth-quarter results.
"Even though Ashtead are listed over here, they are predominantly a US-exposed company," Manoj Ladwa, head of trading at TJM Partners, said, adding that a slowdown in the US market wasn't helping the stock. The bluechip FTSE 100 index was down 1 percent at 5,931.78 points at its close after earlier rising over the 6,000.00 level, its highest since early January.
The benchmark index is still down around 5 percent following a commodities-led sell off earlier this year. Also among the fallers was energy supplier Centrica, down 4.9 percent following a downgrade to "sell" by Societe Generale. Travel and leisure stocks, including cruise operator Carnival and airlines IAG and easyJet all fell between 3 and 6.4 percent, hit by a rallying oil price as Brent Crude touched a three week high.
A Russian official said Saudi Arabia had proposed that oil-producing countries cut output by up to 5 percent each, which boosted the oil price and commodity-related stocks, with the UK Oil and Gas index closing in positive territory, up 1.9 percent. Shares in mining companies BHP Billiton and Antofagasta rose 1.4 percent and 2.3 percent respectively, while Anglo American jumped more than 9 percent after the company said it produced more iron ore last year.
Iron ore is one of the biggest earners for Anglo American, which also produces coal, copper, platinum and diamonds. The mood remained fragile after the US Federal Reserve said on Wednesday it was "closely monitoring" global economic and financial developments, signaling it had accounted for a stock market selloff but wasn't ready to abandon a plan to tighten monetary policy this year.
Data showing that Britain's economy ended 2015 on a soft note also didn't aid sentiment. The annual pace of growth slowed to its weakest in nearly three years. Among mid-cap travel stocks, British transport company FirstGroup dropped more than 12 percent after it warned its annual profit would come in lower than it expected, citing wet weather and flooding in Britain and driver shortages in the United States.
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