London Market: Nato onslaught depresses UK stocks

United Kingdom stocks may fall this week on reluctance to invest while military action continues in Yugoslavia. However, BP Amoco and other oil companies may stem the decline as crude oil gains.

"The war will subdue enthusiasm until we know what the outlook is," according to Nat Jolowicz at Quilter & Co. "People are always unwilling to make investments at times of uncertainty."

The FT-SE 100 Index fell 0.4 per cent on the week to 6139.2. Banks led the declines on concern over trading losses in emerging markets.

Oil stocks rose the most. Crude oil rose 4.8 per cent last week to $14.10 a barrel on optimism that oil producers will cut output enough to eliminate a worldwide supply glut.

OPEC joined other producers in agreeing to cut world crude supply by 2.7 per cent. "We have come back to oil stocks in recent weeks," said Vincent Auriac, at Apoge in Dijon, France.

Oil prices rose on the recovery of recession-hit Asian economies, which will "increase world demand for oil".

Defence companies may benefit from increased demand for military equipment if the Yugoslav conflict continues. British Aerospace rose more than 8 per cent. The company produces the Harrier jets in action over Serbia, and it helps to produce Tornado combat aircraft that are being used by the German air force.

"There are certain stocks that will benefit from the war going on, like aerospace," said Jolowicz, "and also those that supply the aerospace companies ultimately will gain."

Apollo Metals, which supplies metal to British Aerospace may also go up.

Gilts may rise as new evidence that the economy remained weak in the first quarter, bolsters expectations for lower interest rates.

"There's a fair amount of fuel for the Bank of England to be looking to cut again," said Michael Saunders, UK economist at Salomon Smith Barney. "They might hold off until May, then cut by 25 to 50 basis points."

Gilts fell on Friday, as the yield on the benchmark rose by 6 basis points to 4.55 per cent.

While bonds maturing in less than five years may rise on the rate outlook, "the long end of the market is a little more of a danger, because of international events," according to Andrew Milligan, at Morley Fund Management.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created