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
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’