FTSE slips early on weak commodities
The leading share index edged down early on Tuesday as weak metal and crude oil prices weighed on commodity stocks, though banks gained on a UK government plan to bolster the slumping housing market.
FTSE gains as metals spur minersBy 8:33 a.m., the commodity-heavy FTSE 100 was down 15.7 points, or 0.3 percent, at 5,587.1, after falling 0.6 percent on Monday to snap a three-day winning run. The benchmark is down 13 percent so far this year.
Energy stocks fell as crude prices CLc1 extended Monday's $4 plunge by more than $1 to below $109 a barrel amid early signs that the weakened Hurricane Gustav had spared major Gulf oil facilities.
BP, Royal Dutch Shell, gas producer BG Group, Cairn Energy and Tullow Oil were off between 1.1 and 3.9 percent.
Weaker metal prices also weighed on mining stocks, with BHP Billiton, Rio Tinto, Xstrata, Anglo America, Antofagasta, Vedanta Resources and Eurasian Natural Resources down 1.4 to 3.3 percent.
Lonmin added 0.3 percent after it said it continued to believe that Xstrata's unsolicited, pre-conditional proposed offer undervalued the company's assets and reserves and would continue to oppose it.
Falling oil prices lifted British Airways, which soared 5.1 percent to top the FTSE 100 gainers.
Prime Minister Gordon Brown will unveil plans later on Tuesday to boost the country's slumping housing market as he launches a fightback after nearly a year trailing in the opinion polls.
"It's more of a cosmetic initiative. It's not really going to have a huge amount of effect on the market place. It shows willing socially and I think that's correct," said David Buik, strategist at BGC Partners.
Midcap housebuilders Persimmon, Taylor Wimpey, Barratt Developments, Bovis Homes and Bellway rose 3.9 to 8.9 percent. Building materials distributor Wolseley advanced 3.1 percent.
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