(Alliance News) - Stock prices in London opened lower on Tuesday as heavyweight oil majors absorbed losses in the FTSE 100, while Sirius Minerals weighed on the midcap index after putting plans for a bond issue on hold.
In addition, worries about tensions between the US and Iran continue to depress sentiment.
US President Donald Trump said it is "looking like" Iran was responsible for the attacks on key oil installations in Saudi Arabia but added he does not want war.
The president, speaking at the White House, said the US is not looking at retaliatory options until he has "definitive proof" that Iran was responsible. But he told reporters in the Oval Office the US "is prepared" if the attacks warrant a response.
Secretary of State Mike Pompeo said "emerging information indicates that responsibility lies with Iran".
Iran has denied involvement, though it comes amid heightened tensions over Tehran's unravelling nuclear deal with world powers, including the US, which pulled out of the deal last year.
The large-cap index was down 8.71 points, or 0.1%, at 7,312.70. The FTSE 250 was down 77.40 points, or 0.4%, at 19,982.90. The AIM All-Share was down 4.11 points, or 0.5%, at 883.05.
The Cboe UK 100 index was down 0.5% at 12,394.30. The Cboe UK 250 was down 0.1% at 17,951.89. The Cboe UK Small Companies was up 0.1% at 10,951.12.
In European equities, the CAC 40 index in Paris was down 0.6% and the DAX 30 in Frankfurt down 0.5%.
On the London Stock Exchange, oil majors were leading the blue-chip risers for the second consecutive day, tracking spot oil prices higher.
Royal Dutch Shell 'A' shares were up 0.9%, and Shell 'B' were up 1.1%. BP was 0.8% higher. Shell is London's largest company by market capitalisation, while BP is the third largest.
Brent oil was quoted at USD68.60 a barrel Tuesday morning, up from USD67.66 late Monday. Late Friday, Brent traded only just above USD60 a barrel, meaning the North Sea benchmark is up almost 15%.
"The reason we are not seeing the same momentum in the oil price today is because of two reasons: firstly, feeble economic growth because of the ongoing trade between the US and China. Finally, rising oil prices are likely to trigger recession fears once again, because higher oil prices are negatively correlated with economic growth," commented ThinkMarkets analyst Naeem Aslam.
At the other end of the large-cap index, Johnson Matthey was the worst performer, down 2.8%, after Barclays downgraded the speciality chemicals company to Equal Weight from Overweight.
In the FTSE 250, Sirius Minerals was down 63% at the open after the fertiliser firm said it is to carry out a strategic review after a failure to complete crucial debt funding for the Woodsmith fertiliser project.
Sirius believes its USD500 million senior note offering can not go ahead "in current market conditions", and as a result, it will be scaling down construction at the polyhalite project in North Yorkshire while a strategic review is carried out.
The USD500 million note offer had been postponed in August due to poor market conditions. It formed part of USD3.8 billion of stage-two funding for Woodsmith, and a USD2.5 billion revolving credit facility had been reliant on a USD500 million note offering being completed.
Sirius had hoped to begin production at the Woodsmith mine by the end of 2021.
The pound was quoted at USD1.2408 Tuesday morning, lower than USD1.2417 late on Monday.
A legal battle over Prime Minister Boris Johnson's controversial decision to suspend Parliament for five weeks is set to be heard by the UK's highest court.
The Supreme Court in London will hear appeals from two separate challenges brought in England and Scotland to the prorogation of Parliament over three days, starting on Tuesday.
The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite closed down 1.7%, while the Hang Seng index in Hong Kong is down 1.4%. Financial markets in Japan reopened Tuesday after being closed for a holiday on Monday.