London open: UK stocks retreat from three-week high on Greek politics, oil prices

Political uncertainty in Greece and falling oil prices were weighing on UK stocks on Tuesday as markets pulled back from a three-week high.

The FTSE 100 was down 0.6% at 6,594 in early trading, snapping an eight-day winning streak. The index settled at 6,633.51 on Monday, its highest close since 8 December.

Financial markets worldwide were likely to remain relatively quiet with many still away for the Christmas break.

However, Greek politics will be in focus for those returning from holidays after parliament failed to elect a president on Monday, triggering a snap general election on 25 January.

Concerns about the increasing support for anti-austerity parties caused bond yields to soar on Monday in Greece - 10-year bond yields standing at 9.5% for the first time since September 2013 - and the wider Eurozone periphery.

Oil prices declined for the fourth straight day on Tuesday with West Texas Intermediate futures falling 1% to $53.10 a barrel and Brent down 1.1% at $57.23. WTI settled at $53.61 on Monday, its lowest close since May 2009.

US government data due out Wednesday is expected to show that crude stockpiles stayed at 387.2m barrels last week, with inventories remaining at their highest since June.

Next gains, oil stocks slide

Fashion retailer Next rose strongly after forecasting annual profits slightly ahead of guidance and announcing a new 50p special dividend. Next said it now expected full-year profits to be within £10m either side of £775m, £5m ahead of the midpoint profit guidance it issued in October.

Other retailers were also making gains such as Marks & Spencer, Wm Morrison, Tesco and N Brown.

Oil producers and services stocks such as Tullow Oil, Weir Group, Shell, Premier Oil, BP and Hunting were lower as crude prices continued to fall. According to financial risk management firm Company Watch, 70% of UK-listed oil and gas groups are unprofitable at current crude prices and a third are in danger of bankruptcy.

BG Group also declined despite taking a step towards starting production from three oil and gas fields off the coast of Brazil.

KAZ Minerals fell even though it negotiated new bank terms for $2.3bn of its bank debt, with interest rates cut 30 basis points and more flexibility to mitigate for exchange rate movements.

Market Movers
techMARK 2,957.61 -0.37%
FTSE 100 6,594.09 -0.59%
FTSE 250 15,985.66 -0.41%

FTSE 100 - Risers
Next (NXT) 6,780.00p +4.07%
Marks & Spencer Group (MKS) 486.00p +0.58%
Morrison (Wm) Supermarkets (MRW) 184.00p +0.55%
Tesco (TSCO) 189.10p +0.34%
Whitbread (WTB) 4,740.00p +0.30%
International Consolidated Airlines Group SA (CDI) (IAG) 472.80p +0.23%
easyJet (EZJ) 1,644.00p +0.12%
AstraZeneca (AZN) 4,562.00p +0.11%
Reckitt Benckiser Group (RB.) 5,220.00p +0.10%
BAE Systems (BA.) 475.70p +0.02%

FTSE 100 - Fallers
Tullow Oil (TLW) 410.40p -2.82%
Weir Group (WEIR) 1,892.00p -1.82%
Royal Mail (RMG) 434.50p -1.81%
Royal Dutch Shell 'A' (RDSA) 2,173.00p -1.61%
BG Group (BG.) 876.50p -1.48%
Royal Dutch Shell 'B' (RDSB) 2,252.00p -1.42%
Old Mutual (OML) 190.10p -1.40%
British Land Co (BLND) 771.00p -1.34%
Babcock International Group (BAB) 1,058.00p -1.31%
Coca-Cola HBC AG (CDI) (CCH) 1,220.00p -1.29%

FTSE 250 - Risers
Computacenter (CCC) 615.00p +4.24%
Millennium & Copthorne Hotels (MLC) 586.00p +1.56%
Saga (SAGA) 150.90p +1.41%
Ocado Group (OCDO) 399.70p +1.19%
Redefine International (RDI) 54.75p +1.01%
Brown (N.) Group (BWNG) 359.20p +0.93%
Hikma Pharmaceuticals (HIK) 1,970.00p +0.92%
Petra Diamonds Ltd.(DI) (PDL) 194.70p +0.83%
Pets at Home Group (PETS) 201.60p +0.80%
Nostrum Oil & Gas (NOG) 433.00p +0.70%

FTSE 250 - Fallers
Premier Oil (PMO) 163.00p -3.03%
IP Group (IPO) 211.00p -2.94%
Game Digital (GMD) 349.80p -2.78%
Vedanta Resources (VED) 573.00p -2.72%
Hunting (HTG) 523.50p -2.70%
Alent (ALNT) 325.20p -2.66%
RPS Group (RPS) 210.80p -2.45%
Polymetal International (POLY) 541.00p -2.08%
Genus (GNS) 1,281.00p -2.06%
Riverstone Energy Limited (RSE) 847.00p -2.02%