Leading shares ended the last full day of trading before the New Year on a downbeat note.
After eight days of rises, the FTSE 100 fell 86.51 points or 1.3% to 6547.00. On this day fifteen years ago the index hit its all time peak of 6930, and despite attempting to regain it during the year, that target now seems some way off.
Meanwhile it would take a major surge in Wednesday’s curtailed trading session for the index to maintain a 12 year run of December gains, given it started the month at 6722.
A volatile oil price - Brent crude fell as low as $56.74 a barrel on concerns of oversupply and falling demand before recovering to edge up to $58 - put pressure on energy companies. Royal Dutch Shell A shares fell 48.5p to £21.60, while Tullow Oil dropped 6.9p to 415.4p. BG lost 21.1p to 868.6p despite its partner Petrobras submitting declarations of commerciality for three oil and gas fields in Brazil and BP ended 8.7p lower at 409.3p even as it confirmed it had started production from the Kinnoull field in the north sea.
Continuing concerns about economic growth in China, a key consumer of commodities, left the mining sector lower, with Anglo American down 11p at 1203.5p and BHP Billiton 17p lower at £13.90.
But a jump in the gold price as investors sought a haven in the uncertainty helped push Randgold Resources 92p higher to £43.36 and Mexican precious metals miner Fresnillo up 19p to 768.5p. Chris Beauchamp, market analyst at IG, said:
If things carry on as they are it doesn’t look as if the FTSE 100 will have a particularly happy New Year period. But then 2014 as a whole has been disappointing for the index, as it fell behind its peers. Other indices may have seen fresh all-time highs during the year but the FTSE 100 is still yet to revisit the highs last seen back in 1999. As oil and mining stocks remain weak, it seems that this baleful situation is not likely to change.
Royal Mail, which moved higher on Monday in the wake of the collapse of rival City Link, fell back again to close 15.9p lower at 426.6p.
A notable gainer was retailer Next, up 210p to £67.25 after a better than expected Christmas performance.
Airlines also climbed higher, with the weak oil price leading to cheaper fuel costs. EasyJet added 22p to £16.64 and British Airways owner International Airlines Group put on 10p to 481.7p.
Among the mid-caps, property website Rightmove rose 30p to £22.30 as it unveiled a share buyback programme due to start on 2 January.
