London close: Stocks close lower as oil prices waver

The FTSE closed slightly lower on Friday as the rally in oil prices snapped and a key survey showed an unexpected fall in US consumer confidence.

Oil prices wavered late in the session after earlier gains, with West Texas Intermediate falling 0.05% to $40.18 per barrel and Brent crude rising 0.57% to $41.78 per barrel.

Prices have risen more than 50% from 12-year lows reached in December after Organization of the Petroleum Exporting Countries (OPEC) floated the idea of a production freeze.

In economic data, the University of Michigan's consumer sentiment index unexpectedly fell in March, to a reading of 90.0 from 91.7 in February and versus expectations of 92.2.

Capital Economics said the decline in the consumer sentiment index “illustrates that higher gasoline prices more than offset the positive impact to sentiment from the rebound in stock markets”.

Meanwhile, Federal Reserve Bank of New York President William Dudley said the financial system is “much more resilient” following the 2008 crisis, but “more work still lies ahead” to prevent another one from happening. Dudley said there were limits to the supervision of banks in averting another crash and urged policymakers to find ways to better educate the industry about the role of supervisors.

Elsewhere, the European Central Bank’s chief economist Peter Praet said further cuts to interest rates are possible if the central bank’s recently announced barrage of measures fail to boost the economy.

“We have not reached the physical lower bound. If new negative shocks should worsen the outlook or if financing conditions should not adjust in the direction and to the extent that is necessary to boost the economy and inflation, a rate reduction remains in our armoury,” he told Italian newspaper La Repubblica.

German producer prices fell more than expected in February, according to the latest data from Destatis. Producer prices dropped 0.5% from January, which was steeper than the 0.2% decline pencilled in by economists, as energy prices slid 9.4% on the month. On the year, producer prices were down 3%, missing expectations for a 2.6% drop.

On the company front, shares in Sports Direct surged, with traders attributing the push higher to short-covering ahead of the stock’s demotion to the FTSE 250 next week.

The retailer has been under the cosh since late last year, when it was hit by a damning report in the Guardian about its treatment of staff and pay, while a profit warning in January caused the shares to tank.

Smiths Group got a boost after RBC Capital Markets upgraded the stock to ‘outperform’ from ‘sector perform’ and lifted the price target to 1,225p from 1,050p saying it expects the recent outperformance to continue.

Going the other way, Berkeley Group was in the red despite saying it expected current year results to be at the top end of expectations, after absorbing approximately £25m of accelerated operating expenses. Fellow housebuilders Persimmon, Barratt Developments and Taylor Wimpey also declined.

“With the sector looking so fully valued versus its position just a couple of years ago, we should get used to this share price reaction – the easy days for the sector are now well behind it,” said Chris Beauchamp, senior market analyst at IG.

Restaurant and pub operator Mitchells & Butlers was up after having its 'buy' rating reiterated by analysts at Deutsche Bank.

Real estate investment trust Hansteen Holdings was under pressure in afternoon trading, after it emerged its joint chief executives were planning to sell a combined 1.9% stake in the firm.

Market Movers

FTSE 100 (UKX) 6,189.64 -0.19%
FTSE 250 (MCX) 16,908.93 0.36%
techMARK (TASX) 3,073.67 -0.18%

FTSE 100 - Risers

Standard Chartered (STAN) 492.10p 7.20%
Sports Direct International (SPD) 425.10p 5.88%
GKN (GKN) 293.10p 3.86%
Shire Plc (SHP) 3,691.00p 3.45%
TUI AG Reg Shs (DI) (TUI) 1,025.00p 3.33%
Whitbread (WTB) 3,932.00p 3.09%
Smiths Group (SMIN) 1,106.00p 2.79%
Anglo American (AAL) 555.40p 2.68%
International Consolidated Airlines Group SA (CDI) (IAG) 565.00p 2.54%
Ashtead Group (AHT) 876.00p 2.46%

FTSE 100 - Fallers

Mondi (MNDI) 1,317.00p -4.91%
Antofagasta (ANTO) 516.50p -3.91%
Sainsbury (J) (SBRY) 271.30p -3.62%
Hikma Pharmaceuticals (HIK) 1,828.00p -2.82%
Berkeley Group Holdings (The) (BKG) 3,185.00p -2.21%
Randgold Resources Ltd. (RRS) 6,510.00p -2.18%
Royal Dutch Shell 'B' (RDSB) 1,707.50p -1.78%
BAE Systems (BA.) 497.10p -1.76%
Persimmon (PSN) 2,076.00p -1.75%
Fresnillo (FRES) 990.50p -1.64%

FTSE 250 - Risers

Clarkson (CKN) 2,321.00p 10.00%
Enterprise Inns (ETI) 82.80p 7.18%
Renishaw (RSW) 2,024.00p 5.53%
International Personal Finance (IPF) 301.10p 5.13%
Mitchells & Butlers (MAB) 279.50p 5.00%
BGEO Group (BGEO) 2,021.00p 4.55%
Grafton Group Units (GFTU) 733.00p 4.42%
Allied Minds (ALM) 415.30p 4.09%
PayPoint (PAY) 765.00p 4.08%
Pendragon (PDG) 37.00p 3.90%

FTSE 250 - Fallers

Home Retail Group (HOME) 163.20p -9.93%
Melrose Industries (MRO) 338.60p -5.07%
Centamin (DI) (CEY) 92.55p -5.03%
Halma (HLMA) 854.50p -4.15%
Bellway (BWY) 2,442.00p -3.13%
NCC Group (NCC) 246.20p -3.11%
Dunelm Group (DNLM) 941.00p -2.69%
Wood Group (John) (WG.) 636.50p -2.30%
Cable & Wireless Communications (CWC) 74.10p -2.18%
P2P Global Investments (P2P) 900.00p -2.12%