Oil stocks drag FTSE lower

Heavyweight oil stocks dragged Britain's top shares lower on Tuesday, reversing earlier gains that had been driven by strength in banks and miners, as investors proved loath to push the blue chip index back up to 2012 highs. The FTSE 100 index closed down 33.15 points, or 0.6 percent, at 5,869.55, near session lows having swung around from the day's peak at 5,941.90, just 50 points away from the year's high.
Integrated oils were the biggest drag on sentiment as profit-takers moved in following strong gains in the previous session, with BG Group the worst off. BG shed 2.9 percent, suffering alongside France's Total, which tumbled following news of a massive gas leak at it's Elgin platform in the North Sea.
BG has around a 14 percent stake in the Elgin field. Wolseley was the top blue chip faller, down 3.3 percent, as the world's biggest building supplies company said recent growth had slowed on weaker trading in Europe Wolseley, which has major exposure to the US housing market, also suffered after the Case-Schiller US home prices index came in unchanged in January, and as US consumer confidence fell by more than expected in March, exacerbating worries over the health of the world's biggest economy.
"In the US, the housing market recovery is progressing at a glacial pace, with the best that can be said about today's data being that house price deflation is marginally less bad than it was," said Rebecca O'Keeffe, Head of Investment at Interactive Investor. US blue chips were flat by London's close, having posted strong gains on Monday after Federal Reserve Chairman Ben Bernanke signaled a supportive monetary policy would remain even though the job picture has begun to improve.
Miners bucked the weaker market trend, supported by a firmer copper price, which jumped 2 percent on Monday after Bernanke's pledge boosted demand expectations for the metal. Kazakhmys was a strong sector gainer, up 2.1 percent after its full year beat expectations.
"While the outlook for copper equities remains challenged by mounting cost inflation, Kaz remains our preferred European copper miner due to its low valuation and attractive exposure to power markets," Jefferies International said, repeating its "buy" rating and 1250 pence target on Kazakhmys.
Banks provided the biggest boost for the blue- chips, led by Royal Bank of Scotland, up 3.3 percent, after people familiar with the matter said Britain had held talks to sell part of its stake in the bank to Abu Dhabi investors. Abu Dhabi, one of the oil-rich states of the United Arab Emirates, could be attracted to a deal after making billions of pounds on a bet on rival British bank Barclays during the financial crisis.
"Whilst a reduction in state ownership would be seen as a positive move, if the government were to remain a majority shareholder in RBS then very little would have changed. Nonetheless the market has warmed to the story and RBS and the other high street names are trading higher on the day," Silverwind Securities said in a note. Barclays added 1.5 percent, and global heavyweight HSBC gained 0.6 percent.