Leading UK shares closed lower on Tuesday, hurt by earnings from oil major BP which came in below already lowered expectations, with dollar-earning companies broadly hurt by another fall in the US currency.
BP, the world's second-biggest oil firm, closed down 2.5 percent after it posted fourth-quarter adjusted net profit of $2.667 billion, below the $2.9-3.2 billion forecast by analysts.
The shortfall was partly due to unusual price-lag and currency impacts but the shares moved above a session low amid trader reports that BP had started the share-buyback announced with the results.
Market watchers said investors took the BP results badly as they followed disappointing results last week from sector rival Shell.
Oil and gas shares clipped ten points off the FTSE-100 index, which finished 29.5 points lower at 4,404.9 points, giving back most of Monday's 32-point rise.
"It's really been a pretty ropy old performance and with BP and Shell being such heavyweight constituents of the FTSE-100 it's very hard for stocks to make progress when this kind of thing happens," said Jeremy Batstone, Director of Investment Strategy at stockbrokers Fyshe Group.
He added that the market mood was hesitant before a packed diary of UK results on Thursday and as investors await clues on US monetary policy from a speech by Federal Reserve Chairman Alan Greenspan on Wednesday.
Information provider Reuters was the top FTSE decliner, down four percent, with some investors saying a strong run over the past week had left little room for further short-term gains.
The stock remains one of the FTSE-100's top performers so far this year, having climbed around 45 percent. Analysts said it had jumped in recent days on hopes Reuters will give bullish guidance when it reports annual results on February 17.
"It's had such a phenomenal run and it's run into a little profit-taking," said media analyst Omar Sheikh of UK brokerage Charles Stanley.
British Airways emerged at the top of the gainers' list, up 4.3 percent after analysts at Deutsche Bank raised their rating to "buy" from "hold", a day after Europe's largest airline reported its biggest third-quarter profit in 12 years.
Engineering firm Smiths Group gained 2.5 percent after it won a computer systems contract with US aerospace firm Boeing, with potential future sales from the systems of over $1 billion.
Plumbing and building materials company Wolseley rose two percent after brokerage Cazenove raised its rating to "buy" from "hold". Cazenove said that it had turned more positive on Wolseley after a meeting with its management.
Among mid-caps, Channel Tunnel operator Eurotunnel slid 15 percent to add to Monday's 10 percent drop, sparked when it warned it may not survive without another major debt restructuring.