Falling oil and commodity prices undo FTSE''s earlier recovery

By MoneyhighStreet Staff. Published on July 24, 2008 This post currently has no comments.

Easyjet
Falling commodity prices drove the FTSE down today (July 24th), after it rallied yesterday on news of HBOS'' possible takeover and a share buyback scheme from Vodafone.

According to the Press Association, worries about lower metal prices and the fact that crude oil was "trading at its lowest levels since the beginning of June" hit the blue chip index hard this afternoon, particularly among mining and petrochemical firms.

As a result, the market closed down nearly 90 points at 5362.30.

Despite the price of crude oil slumping to $125 a barrel, airlines struggled today. Low-cost carrier easyJet saw over ten per cent wiped off its stock value after it said it would be cutting its winter capacity in the face of soaring fuel costs.

The carrier''s stocks closed at 332.50 after it said that it expects full year pre-tax profit to fall as much as 45 per cent because of its higher fuel costs.

On the back of the news, other aviation companies struggled - with British Airways closing down eight per cent at 242 and low-cost rival Ryanair losing three per cent.

However, there was some good news for the market. Yell''s shares climbed over ten per cent after the debt-ridden owners of the Yellow Pages revealed they had managed to increase earnings.

Kingfisher, the owners of DIY chain B&Q, also advanced 6.5 per cent to close at 124.30, after it revealed solid trading figures. The company said UK sales jumped 5.1 per cent in the quarter "boosted by stronger seasonal sales and Screwfix trade counter openings".