HURRICANE Sandy not only battered the United States coast last night but also took its toll on oil prices and insurance stocks.
Two-thirds of oil refineries along the US east coast closed ahead of the storm hitting, forcing down crude prices as demand dropped.
The New York stock exchange and the Nasdaq will stay closed for a second day today and could remain shut tomorrow depending on the levels of damage inflicted overnight and the time it takes for the storm to pass.
The closure of the US stock exchanges – the first weather-related shut-downs for 27 years – led to thin trading in London, with volumes at just 60 per cent of their 90-day averages.
Ishaq Siddiqi, market strategist at ETX Capital, warned: “Insurance stocks in Europe are taking a beating on the disaster Sandy could potentially cause, with some suggesting it could be the biggest storm to hit the US mainland.”
Lloyd’s of London insurers have so far had a benign year for natural catastrophes, in sharp contrast to the previous year when the specialist market was pushed to a loss by a series of disasters. In the FTSE 250 index, Catlin Group fell 2 per cent or 8.3p to 464.8p, Amlin dropped 7p to 367.2p and Hiscox declined 8.7p to 475.5p.
The top-flight FTSE 100 index dipped by 11.61 points to 5,795.1, with oil giant BP accounting for about five points of the fall ahead of its third-quarter results today. BP closed down 6.6p or 1.5 per cent at 425p.
Financial stock Hargreaves Lansdown was the biggest faller on the Footsie after analysts at Citi downgraded the stock and placed the firm on a “sell” rating. Shares slipped 31.5p at 727.5p.
But accountancy software firm Sage Group headed in the opposite direction – closing up 1.8 per cent or 5.6p at 309.8p – after Citi’s brokers upgraded the stock to “buy” from “neutral” as part of a wider review of the technology sector.
Among the Scottish stocks, Terrace Hill – the Glasgow-based property developer run by oil tycoon Robert Adair – climbed 2.5 per cent or 0.25p to 10.38p after it sold its student accommodation blocks in Southampton to Legal & General. Under the deal, L&G will fund the construction of the flats, due to be completed in 2014.
