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London close: Markets finish lower despite late rally

Wed, 28th Aug 2013 17:05

Markets rallied in afternoon trade on Wednesday, helped by dovish remarks from Bank of England (BoE) Governor Mark Carney and a decent start on Wall Street, but stocks still finished in the red as escalating concerns about Syria continued to dampen sentiment.The FTSE 100 finished down 10.91 points at 6,430.06, well off its intraday low of 6,393.65.While the Syrian government has so far denied the use of chemical weapons, US Vice President Joe Biden has said there is "no doubt" that Syria carried out the attacks last week that killed well over a thousand people. White House spokesman Jay Carney said: "There must be a response [...] What form that response will take is what the President is assessing now."West Texas crude futures were trading at a two-year high of $112.24 a barrel today while Brent crude jumped to a six-month high of $117.34 on fears that the crisis in Syria could disrupt oil supplies from the Middle East.Markets are now concerned about how much further oil has to go and what impact elevated prices will have on the global economy. According to analysts at Societe Generale, Brent may jump as high at $150 a barrel if supplies are disrupted.Capital Economics analysts estimate that every $10 rise in the price per barrel of Brent could shave 20-30 basis points of global economic growth. "A rise to, say, $150, could therefore knock one percentage point off global growth, turning what is already a lacklustre recovery into something approaching stagnation."Carney speech in focusProviding some support this afternoon were stocks in the banking sector after Mark Carney's much-anticipated speech today, his first as BoE Governor. Carney relaxed strict liquidity requirements for UK banks that had passed a minimum capital threshold in an effort to encourage lending.In a relatively dovish speech at the University of Nottingham, Carney also attempted to reassure markets that a Bank Rate hike wouldn't necessarily come as soon as unemployment hit the Monetary Policy Committee's 7% target. Instead, he stressed that this level was not a trigger but just a guide. Households and businesses can operate in the "certainty that interest rates will not rise too soon", he said.He also said that the possibility of further quantitative easing remains open under the BoE's forward guidance plan and stimulus tools will be used if the economy needs a boost.Joe Rundle, Head of Trading at ETX Capital, said that Carney was "being a bit of a bear by reminding us that we shouldn't get too excited too quickly about the current growth momentum we have seen in the UK this year because it's clearly not strong enough".FTSE 100: Oil and banking stocks on the upOil producers were tracking crude prices higher today with BG Group, Royal Dutch Shell, Tullow and BP in demand on the FTSE 100. Oil strength however was having an adverse effect on airline stocks given concerns about how they will feed into jet fuel costs - IAG and easyJet were heavy fallers today..Banking shares including RBS, Lloyds and Barclays were making gains this afternoon after Carney's relaxed rules on liquidity requirements. Meggitt, the aerospace, defence and energy group, fell after unveiling plans to acquire Piezotech, a US ceramic devices producer, for $41.2m.A number of FTSE 100 stocks went ex-dividend today, meaning that new investors won't have access to the companies' latest payouts. These include: CRH, Glencore Xstrata, Legal & General, Tullow Oil and Wood Group.FTSE 100 - RisersEurasian Natural Resources Corp. (ENRC) 227.60p +5.86%BG Group (BG.) 1,267.50p +4.75%G4S (GFS) 252.40p +2.89%Anglo American (AAL) 1,530.50p +2.20%Royal Dutch Shell 'B' (RDSB) 2,221.00p +2.02%Royal Dutch Shell 'A' (RDSA) 2,130.00p +1.79%Royal Bank of Scotland Group (RBS) 336.00p +1.79%Lloyds Banking Group (LLOY) 73.89p +1.73%Barclays (BARC) 284.55p +1.37%BP (BP.) 452.65p +1.24%FTSE 100 - FallersInternational Consolidated Airlines Group SA (CDI) (IAG) 287.00p -4.49%Legal & General Group (LGEN) 187.40p -3.45%Randgold Resources Ltd. (RRS) 5,195.00p -2.62%Associated British Foods (ABF) 1,838.00p -2.60%Aggreko (AGK) 1,572.00p -2.24%GKN (GKN) 324.10p -2.20%Carnival (CCL) 2,431.00p -2.09%Shire Plc (SHP) 2,373.00p -2.02%Rolls-Royce Holdings (RR.) 1,092.00p -1.97%WPP (WPP) 1,178.00p -1.92%FTSE 250 - RisersAfrican Barrick Gold (ABG) 179.90p +5.64%Hochschild Mining (HOC) 235.00p +5.33%Alent (ALNT) 363.80p +5.17%Xaar (XAR) 869.50p +4.76%EnQuest (ENQ) 127.20p +4.26%Enterprise Inns (ETI) 145.50p +4.08%Hansteen Holdings (HSTN) 99.00p +3.12%esure Group (ESUR) 243.50p +2.57%Soco International (SIA) 386.00p +2.52%Drax Group (DRX) 702.50p +2.33%FTSE 250 - FallersKenmare Resources (KMR) 27.00p -8.63%Berkeley Group Holdings (The) (BKG) 2,087.00p -6.16%Polymetal International (POLY) 698.00p -5.80%Halfords Group (HFD) 364.20p -5.60%Ashtead Group (AHT) 638.50p -4.42%Ferrexpo (FXPO) 172.50p -4.33%Countrywide (CWD) 565.00p -4.24%Henderson Group (HGG) 167.40p -3.90%Mondi (MNDI) 989.00p -3.79%Victrex (VCT) 1,566.00p -3.39%BC

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