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FTSE 100 closes lower as jittery trading paints the blue-chips red

Published: 11:57 16 Jun 2014 EDT

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The FTSE 100 closed Monday lower, as jittery trading saw the red as a host of uncertainties dented sentiment.

Perhaps unsurprisingly, given recent near-high trading and the de-stabilising threats posed by geopolitical current crises.

Conflicts inside Iraq continue to keep upward pressure on oil prices – a threat in itself to the international economy – and at the same time there’s concern for Europe’s gas supply as Russia turned off taps to Ukraine.

Add to that a slowing and apparently short lived ‘housing boom’, expectations that Bank of England chief Mark Carney is going to raise rates and another signal or two that the tide is going out on the previously buoyant market for IPOs.

Against this backdrop simply doing nothing looks decidedly bullish for investors.

Ending down 23 points, or 0.34%, the FTSE 100 finished the day at 6,754.

A rush into would be safe-haven assets such as gold and silver meant producers of precious metals were among Monday’s best performing blue-chips.

Mexican miner Fresnillo, for example, was the FTSE 100’s top riser, up 1.8% at 822p per share, Randgold Resources (LON:RRS), meanwhile, climbed just over 1.5%. At the same time the rising price of oil helped Tullow (LON:TLW) and Shell (LON:RDSB) higher. 

As a Rightmove survey claimed a slowing of the recent surge in house prices, homebuilder Persimmon was among the fallers, losing 2.3% to trade at £11.83.

BT (LON:BT.) was another big faller, losing 2.4%, amid a threat that regulators will review an apparently dominant position in the ‘superfast’ broadband market, and separate fears over a growing deficit in pension provisions for almost 320,000 employees.

Smith & Nephew (LON:SN.) dipped again after Medtronic – which was recently rumoured to be mulling a takeover approach – instead confirmed it was buying a Dublin based rival. 

The American group, which is the largest medical device firm in the world, agreed to buy Covidien for US$42.9bn and set-up in Ireland, where it benefits from lower taxes.

The latest wobbles in the IPO market came as low-cost Hungarian airline Wizz grounded its stock exchange ambitions due to “volatility in the airline sector”.

Discount branded sportswear retailer M&M won’t make it to market either as the firm revealed it will instead be bought for up to US$140mln in a deal with a Danish rival.

Monday’s biggest IPO disappointment, however, was the float of Sir Philip Green’s MySale which apparently hit a rather farcical stumbling block.

The share began trading today, but, a mistake when the listing went live triggered kneejerk selling – the broker looking after the listing apparently set the price in pounds (so 2.26) rather than pence (226, as one might expect) and chaos apparently ensued.

By the end of its first trading day the share was at 210p.

Among the small cap stocks, investment company TXO (LON:TXO) advanced 12% at 0.22p, after its tar sands associate Athabasca Resources cleared the decks for an AIM listing later in the year. 

TXO has an 18.8% stake in Athabasca.

Oil and has firms seem to be taking it in turns to storm up the AIM leader board, with Chinese gas junior Leyshon Energy (LON:LEN) up 22%.

Earlier it was the turn of UK Oil & Gas Investments (LON:UKOG), which was up as much as 20% after revealing that site construction has now commenced for the proposed 8,512 feet Horse Hill-1 well, near Gatwick airport.

The well is expected to spud in July 2014 and is targeting a number of conventional stacked oil and gas targets.

UK Oil & Gas has a binding agreement in place to own a direct 7.5% interest in Horse Hill Development, a special purpose company that owns a 65% participating interest and operatorship of the Horse Hill prospect, and an additional interest by virtue of its 6% ownership in the licence's operator, Angus Energy, which owns 40% of Horse Hill Development.

Stellar Resources (LON:STG), which owns 7.5% of Horse Hill Development, was also higher, as was Solo Oil (LON:SOLO), which owns 10% in the project.

CloudBuy (LON:CBUY) rallies after it said it is mystified by the recent share price weakness, as the company is performing strongly. 

Shares tumbled from 31.75p at midday last Friday to 27p at one point on Friday afternoon, before recovering to close at 28.25p, prompting the company to issue a statement to settle shareholders’ nerves.

Shares in cloudBuy shot up 19% to 33.75p on the statement, meaning they are now slightly above the level at which they were before the sudden share price slide started.

A bullish trading statement from Allocate Software (LON:ALL) sees the share price rise of more than 6%. Revenues, underlying earnings and cash generation in the year just ended were ahead of market expectations.

Going the other way, at a rate of knots, is AorTech (LON:AOR). The polymers and medical devices firm was down 23%. 

The company recently changed strategy and decided to outsource manufacturing; this morning it revealed that the manufacturing and licensing agreement with Biomerics, one of its most recent licensees, will prove more costly than expected.

Furthermore, several of AorTech's licensees are experiencing delays through the development and regulatory requirement phases and have yet to achieve commercialisation of their products, while the company has also instigated legal proceedings against its former chief executive officer. The upshot of these developments is that the accounts for the year just ended will include some exceptional charges.

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