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FTSE100: 6501.42 +0.28 (0%)

Eurozone QE hopes help steady market

Mon (close): Oil price worries were overshadowed by hopes of further stimulus from the European Central Bank, but by the close the leading share index remained unchanged.

The index’s year-to-date fall of 1% is the weakest first week of the year since the global financial crisis hit seven years ago.

Oil prices were in focus on Monday with Brent crude down 2.6% at $48.81 a barrel, extending losses after last week reaching its lowest level in over five years.

Goldman Sachs cut its forecast for Brent in three months’ time to just $42 a barrel, and said that prices will “need to stay lower for longer”.

However, the ECB is expected to introduce quantitative easing (QE) when it meets next week, encouraging a slight rally.

Pharmaceutical group Shire was lower after agreeing to acquire US rival NPS Pharmaceuticals for $5.2bn in cash, in a deal which it said will boost its revenue and earnings growth profile, while creating new business opportunities worldwide.

Oil and gas group Afren was a big mover, dropping 30.5% or 12p to 27.3p after reporting that analysis of the Barda Rash field in the Kurdistan region of Iraq showed a “material reduction” in reserve estimates. The company said it is now looking at its “strategic options” for its 60% interest in the project.

Others oil and gas related stocks reacted negatively to the oil price with Weir Group, BG Group, BHP Billiton, Hunting and Wood Group trading firmly in the red. In contrast, the lower oil price was helping stocks in the travel sector higher, including Carnival and TUI.

Taylor Wimpey welcomed the return of a”more balanced” housing market and flagged better trading ahead of full-year results, with the potential for a special dividend thanks to its growing cash pot. Shares closed down 1.5p at 124.2p.

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