London close: UK stocks drop to five-week low as oil sinks further

UK stocks dropped to their lowest levels in five weeks on Wednesday as turmoil in the oil prices intensified with crude prices sinking to a fresh five-year low.The FTSE 100 erased earlier gains to finish down 0.45% at 6,500. It has not closed below this level since 4 November when it settled at 6,453.97.A weaker demand forecast from OPEC and a surprise increase in US crude inventories last week were weighing heavily on oil prices in afternoon trade, with Brent crude was down 4.6% at $64.10 a barrel in London and West Texas Crude tumbled 5.1% to $60.57 a barrel in New York.Brent, having traded at above $100 a barrel until September this year, hasn't fallen this low since mid-2009."Oil prices can't seem to catch a break at the moment," said analyst Chris Beauchamp from IG. "OPEC's decision to slash its demand forecast is merely a reflection of what markets already know - that both supply and demand dynamics are fundamentally bearish."Stock markets had got off to a positive start after weak price data from China sparked speculation that Beijing could inject some more stimulus to prop up growth.Data out overnight showed that Chinese inflation fell to a five-year low of 1.4% in November, down from 1.6% in October and under analysts' estimates for no change. Meanwhile, factory-gate deflation worsened to 11.6%."Equities in China rallied as a fall in consumer price inflation meant the People's Bank of China may have more room to loosen monetary policy, but shares in Europe and the US were less enthusiastic about the prospect of stimulus from either China or Europe with the European Central Bank having held back at the last meeting," said analyst Jasper Lawler from CMC Markets UK.Energy shares tank, Ashtead soarsOil major BP was trading lower after warning of $1bn of restructuring charges over the next five quarters. Details of the charges will be given with each quarter's results, though the majority of the costs are expected to be related to job cuts.Sector peers Tullow Oil, Premier Oil, Afren, BG Group, Ophir Energy, Enquest and Faroe Petroleum were also suffering steep losses.Shares in oil equipment, services and distribution were also falling sharply on the back of fears that producers and explorers will cut back or delay project spend until oil prices recover. Petrofac, Wood Group and Hunting all dropped sharply.BP had already told investors in October that capital expenditure (capex) would fall by $1bn-2bn in 2015 against earlier guidance of $24bn-26bn. The company said on Wednesday that it is still looking "pare or re-phase" capex as part of its 2015 plan, "recognising the current outlook for oil prices".Shares in Ashtead surged after the equipment-rental firm reported a big jump in first-half profits and lifted its full-year forecast. The company said that underlying pre-tax profit jumped by 33% to a record £265.5m in the six months to 31 October, and guided to full-year results "ahead of our previous expectations".A return to sales growth towards the end of the third quarter at N Brown pleased the market, with the home-shopping retailer rising strongly.Airline peers IAG, Easyjet and Ryanair were performing well after the IATA lifted its forecast for profits across the global airline industry for this year to a record $19.9bn. Market MoverstechMARK 2,911.67 +0.17%FTSE 100 6,500.04 -0.45%FTSE 250 15,737.52 +0.15%FTSE 100 - RisersAshtead Group (AHT) 1,175.00p +9.10%Fresnillo (FRES) 770.00p +5.05%Mondi (MNDI) 1,077.00p +2.87%AstraZeneca (AZN) 4,683.00p +2.66%Shire Plc (SHP) 4,429.00p +2.17%St James's Place (STJ) 815.00p +2.07%London Stock Exchange Group (LSE) 2,198.00p +2.00%Hargreaves Lansdown (HL.) 949.00p +1.77%ARM Holdings (ARM) 959.50p +1.75%Travis Perkins (TPK) 1,811.00p +1.57%FTSE 100 - FallersPetrofac Ltd. (PFC) 717.00p -3.37%BG Group (BG.) 872.40p -2.94%Tullow Oil (TLW) 379.50p -2.77%Aggreko (AGK) 1,450.00p -2.62%Royal Dutch Shell 'B' (RDSB) 2,098.50p -2.60%Royal Dutch Shell 'A' (RDSA) 2,035.00p -2.37%Sainsbury (J) (SBRY) 226.40p -2.25%BHP Billiton (BLT) 1,386.50p -1.91%GKN (GKN) 335.00p -1.90%Rio Tinto (RIO) 2,797.50p -1.82%FTSE 250 - RisersBrown (N.) Group (BWNG) 350.20p +7.06%Card Factory (CARD) 265.00p +5.83%RPC Group (RPC) 606.00p +3.41%UBM (UBM) 457.70p +3.34%Vesuvius (VSVS) 439.20p +3.27%Workspace Group (WKP) 722.50p +2.77%Daejan Holdings (DJAN) 5,540.00p +2.69%Betfair Group (BET) 1,500.00p +2.46%Amlin (AML) 459.90p +2.45%Smith (DS) (SMDS) 310.90p +2.44%FTSE 250 - FallersEnQuest (ENQ) 37.61p -8.16%Ferrexpo (FXPO) 61.00p -7.86%Micro Focus International (MCRO) 1,051.00p -7.07%Stagecoach Group (SGC) 379.20p -6.92%Afren (AFR) 36.15p -6.88%Nostrum Oil & Gas (NOG) 500.00p -5.48%Ophir Energy (OPHR) 120.30p -5.28%Hunting (HTG) 510.00p -5.12%Premier Oil (PMO) 173.10p -4.89%Fenner (FENR) 215.20p -4.69%