After a bright start, leading shares are drifting lower again, with oil shares hit by the weakness in crude prices.
Petrofac, the oil services group, is the biggest faller in the FTSE 100, down 27p at £10.33 as three analysts cut their price targets. Goldman Sachs moved from £12.70 to £11.50, Societe General from £12.20 to £11.50 and Natixis from £15 to £13.
Goldman said the recent weakness in the crude price - Brent has dipped another 0.19% to $86 a barrel - could lead to exploration and production companies cutting their capital expenditure plans, with knock on effects to oil services businesses. SocGen agreed:
We now expect the very recent decline in oil prices may trigger another, more pronounced, round of E&P capex cuts (more cuts from international oil companies to protect their dividends and softening investment from national oil companies).
Meanwhile Tullow Oil is down 11p to 513p and Royal Dutch Shell A shares are 37p lower at £21.12.
Overall the FTSE 100 is down 26.31 points at 6283.98, despite a surge in Asian shares overnight with the Nikkei recording its biggest daily rise of the year in the wake of better than expected US confidence figures released on Friday.
But worries about the global economy and geopolitical concerns such as the conflict in the Middle East and the spread of Ebola continue to unsettle investors.
HSBC dipped 4.5p to 619.3p after analysts at Citigroup cut its price target from 685p to 675p, reflecting the effect of regulatory fines on the bank.
But Tesco has added 4.1p to 178.65p ahead of its delayed results, with hopes of disposal news and reports its black hole may be less than expected.
