London close: Stocks slide on oil sector worries

London stocks were on the back foot on Tuesday as concerns about falling oil prices escalated after BP reported a full year loss.

BP posted a full year loss of $6.5bn (£4.53bn), reflecting write-downs and restructuring charges. Fourth-quarter underlying profits fell to $196m, compared with $2.2bn for the same period the previous year. Yet BP held its quarterly dividend at 10 cents a share.

The results weighed on other oil producers including Royal Dutch Shell, BHP Billiton and Tullow Oil.

Adding to worries over the sector, oil prices continued to decline with Brent crude down 4.2% to $32.86 per barrel and West Texas Intermediate down 4.4% to $30.27 per barrel at 1630 GMT.

In economic data, UK construction activity growth slowed in January, according to Markit/CIPS. The purchasing managers’ index fell to 55.0 last month from 57.8 in December, missing forecasts of 57.5. A reading above 50 signals an expansion in the industry while a level below that indicates a contraction.

German unemployment declined 20,000 in January, compared to analysts’ estimates of 8,000 and the previous month’s 16,000 decrease, according to Destatis. The unemployment rate unexpectedly fell to 6.2% from 6.3%.

Among corporate stocks, Sainsbury’s advanced after agreeing a deal to buy Home Retail for about £1.3bn.

TalkTalk jumped after reporting revenue growth of 1.8% in the third quarter, despite losing 101,000 customers due to a serious cyber attack early in the period.

BHP Billiton and Rio Tinto suffered after Standard & Poor's downgraded BHP's credit after the close on Monday and said a further cut is possible, while Rio Tinto was placed under 'creditwatch negative'.

Prudential fell on headlines that China is unleashing new steps to control financial risks and outflows. Bloomberg reported that the currency regulator is imposing restrictions on buying insurance products overseas, specifically a $5,000 cap on insurance products paid for using UnionPay debit and credit cards.

Ocado Group plunged despite reporting double-digit revenue growth for the year. Steve Clayton, head of equity research at Hargreaves Lansdown said the company has been unable to persuade customers to pay the full cost of delivery and has so far not been able to sign multiple deals.

“If Ocado do end up signing multiple deals in multiple territories then Ocado’s shares could well have real potential in the years ahead. But that will be a long haul.”

A.G. Barr rose after JP Morgan Cazenove initiated coverage of the soft drink company at ‘overweight’.

St Modwen Property declined as the developer announced the retirement of long-time chief executive Bill Oliver.

3i Infrastructure rallied after saying its portfolio continued to perform well for the three months to 31 December 2015.

Market Movers

FTSE 100 (UKX) 5,917.09 -2.36%
FTSE 250 (MCX) 16,299.68 -1.15%
techMARK (TASX) 3,137.44 -1.02%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 2,095.00p 3.25%
Sainsbury (J) (SBRY) 250.50p 2.41%
Associated British Foods (ABF) 3,199.00p 1.56%
Berkeley Group Holdings (The) (BKG) 3,547.00p 0.60%
Admiral Group (ADM) 1,775.00p 0.40%
Randgold Resources Ltd. (RRS) 5,060.00p 0.30%
Worldpay Group (WI) (WPG) 310.70p 0.23%
Unilever (ULVR) 3,078.00p 0.21%
BT Group (BT.A) 495.05p 0.17%
Persimmon (PSN) 2,067.00p -0.00%

FTSE 100 - Fallers

BP (BP.) 335.05p -8.69%
Prudential (PRU) 1,216.00p -8.33%
Anglo American (AAL) 252.15p -7.99%
BHP Billiton (BLT) 630.90p -6.96%
Legal & General Group (LGEN) 224.00p -6.71%
Standard Chartered (STAN) 432.95p -5.88%
Old Mutual (OML) 157.50p -5.69%
Glencore (GLEN) 83.07p -5.59%
Carnival (CCL) 3,336.00p -5.09%
Barclays (BARC) 173.75p -4.95%

FTSE 250 - Risers

Allied Minds (ALM) 325.00p 7.58%
Circassia Pharmaceuticals (CIR) 293.60p 3.64%
Barr (A.G.) (BAG) 554.00p 3.45%
Cable & Wireless Communications (CWC) 69.55p 2.43%
Ted Baker (TED) 3,092.00p 2.15%
TalkTalk Telecom Group (TALK) 221.90p 1.84%
UDG Healthcare Public Limited Company (UDG) 555.00p 1.83%
Melrose Industries (MRO) 301.90p 1.79%
Auto Trader Group (AUTO) 405.90p 1.75%
Genus (GNS) 1,480.00p 1.72%

FTSE 250 - Fallers

Weir Group (WEIR) 792.00p -8.70%
Rotork (ROR) 156.50p -7.67%
Tullow Oil (TLW) 158.40p -7.48%
Ocado Group (OCDO) 245.20p -6.87%
Amec Foster Wheeler (AMFW) 385.40p -6.21%
Bodycote (BOY) 511.00p -5.89%
Vedanta Resources (VED) 220.70p -5.60%
Victrex plc (VCT) 1,460.00p -5.56%
Ophir Energy (OPHR) 85.25p -5.28%
G4S (GFS) 210.50p -5.22%