The soaring oil price might be a cause for alarm among economists, governments and commercial users, but the sector's weighting in the London market is providing investors with some protection against the worst of the current sell-off.
The surging oil price gave support to Tullow Oil, 18.5p better at 644.5p, and BG Group, 16.5p better at 897.5p. Credit Suisse upped its target on the latter to 925p from 900p, telling clients that the shares are not expensive and that the stock remains in play as a possible consolidation play among the European oil producers.
The oil major BP was also in demand, climbing another 8.5p to 627p, a 15-month high. Strangely, investors were less keen on Shell, 14p lower at 2,034p as some profits were banked on the back of a much stronger run than BP has been on.
Not surprisingly, the banking sector was the main drag on the blue chips. Barclays was the main culprit as rumours circulated the market that it has approached the Bank of England looking for emergency funding and that its subprime exposure is greater than had been previously thought. David Buick of Cantor Index described the talk as "arrant nonsense" but traders were in no mood to give Barclays the benefit of the doubt.
Its shares closed 34p worse at 537.5p, and is no more than 30 per cent below its April peak. Elsewhere in the banks, Royal Bank of Scotland was in the red, down 23p at 475.5p as Panmure Gordon told its clients to sell, and Lloyds TSB shed 13.5p to 517.5p.
Given the banking bloodbath, traders looked for safe havens. Consumer goods and food were in demand. Unilever followed up on well-received results on Thursday, finding more support to add another 34p to close at 1,730p, while rival Reckitt Benckiser closed 21p better at 2,766p. Meanwhile, J Sainsbury climbed 11p to 542.5p ahead of next Wednesday's "put up or shut up" deadline for suitor Delta Two.
Despite overnight falls in all of the world's major equity markets, London shares held up well in the face of continued talk about the state of the credit markets and a rumour that Bank of England governor Mervyn King was about to announce his resignation. Even so, the FTSE 100 closed 55.5 worse at 6,530.6.
In the second liners, Credit Suisse was bullish on Wellstream Holdings, reiterating its "buy" recommendation and upping its price target to 1,100p. It raised its 2008 earnings per share forecasts for the oil equipment and services group by 45 per cent and by 30 per cent in 2009. Wellstream rallied 70p to 995p, the best performer in the mid-caps, dragging rival Expro International along with it. Expro added 27p to close at 1,239p.
Despite British Airways' cautious outlook on fuel prices, airline stocks closed better as investors looked to BA's bullish profits instead. easyJet closed 4p firmer at 659p, and looks a certainty to move into the blue-chip index in the December reshuffle.
Mid-cap asset managers were under pressure, not just because the wider market and global equities were sharply lower. The talk was that Citigroup was busy placing 4.3 million shares in New Star Asset Management at 309p per share, a substantial discount to Thursday's closing price. Meanwhile, Evolution Securities reiterated its "sell" stance on Henderson Group, telling clients that the price has been forced higher by its dual Australian listing. New Star closed 17p worse at 312.25p, while Henderson shed 9p to 171.5p. Investec was also unloved, falling 19.5p to 550.5p by the close.
Down in the small caps, the disaster of the day the was property and building services group Metnor, as it revealed a shortfall in its full-year results. It told investors that full-year performance would be "substantially" below forecasts. Its shares have been on a sharp downward spiral in recent months and the stock lost another 31p yesterday to close at 267.5p.
Haike Chemicals, the Chinese speciality chemicals group, was heading in the opposite direction after a positive nine-month trading statement, in which the company confirmed that revenue over the period is up 54 per cent to $257m.
Even so, yesterday's 22p rally to 120p will be cold comfort for some investors – the shares were trading a little more than 200p four months ago, and its prospects for the next few months were "challenging".
Investors in Walkabout pub chain owner Regent Inns will be looking to drown their sorrows this weekend. Although the shares only closed a penny worse at 67.5p, they are now worth just over half of their value in May.
The company said that sales have fallen since it last updated the market at the start of October and said that several uncertainties, including England's qualification for the European football championships next year and the smoking ban, make it cautious on near-term trading.