London’s blue-chip stocks swung to a loss by the end of the day, having been higher throughout the morning and early afternoon.
Eventually, the weight of the falling oil stocks was too much for the index to bear.
Jasper Lawler, at CMC Markets, said: “OPEC’s decision to abandon its oil output quota is leading to another collapse in oil prices.”
“The oil price dictated the main winners and losers on the FTSE 100 on Monday,” he added.
A barrel of Brent crude slipped 4.5% to US$41.10 while West Texas Intermediate spilled more than 5% to US$38.
Travel and leisure stocks including Easyjet (LON:EZJ), TUI AG (LON:TUI) and Carnival (LON:CCL) were top risers on the prospect of cheaper fuel.
But lower future oil revenues meant Royal Dutch Shell (LON:RDSB), which spilled 4.5% to 73p to 1,526p, and BP (LON:BP.), down 3.3% or 12p to 347p, were the top fallers.
It meant the FTSE100 ended the day almost 15 points lower to 6,223.
Across Europe, markets fared better, with the German Dax climbing 134 points to 10,886 while the French Cac40 rose 41 points to 4,756.
In the US, however, it was a similar stony to the UK, with the S&P 500 down 12 points at 2,080 while the Nasdaq Composite was off 31 points at 5,111 and the Dow Jones lowered 106 points at 17,742; all three benchmarks were off 0.6%.
Back in the UK, et engine maker Rolls Royce(LON:RR.) led the way. For the large caps as reports over the weekend suggested its major shareholder, US-based ValueAct, will be sitting down with bosses this week to discuss plans to revive its performance.
It is said the activist fund is lobbying for a seat on the board. Shares in Rolls Royce gained around 2.7%, or 16p, to 610p.
Conversely, along with the oil stocks, supermarket chain Tesco (LON:TSCO) found itself near the bottom of the FTSE100.
Jill Easterbrook, a senior executive, will leave the troubled chain early next year after a long stint with the company during which she held roles including chief customer officer, strategy director and clothing director. Shares dropped 3.4% to 157p.
In the small cap arena, Kenmare Resources (LON:KMR) ended the day up by a third to 0.6p as it ended takeover talks with Illuka Resources.
SGRF, a sovereign wealth fund from Oman, has agreed in principle to invest US$100mln subject to other shareholders committing to invest an extra US$75mln.
Elsewhere, Immupharma (LON:IMM) gained around 17.5% to 23.5p as the first of its US sites opened to recruit patients for its pivotal phase III clinical trial of Lupuzor.
Conversely, Hunter Resources (LON:HNT) lost 18% to 0.2p as the firm said it will look at arbitration measures if the sellers of a stake in the Pampamili gold project delay the company’s acquisition of a 51% any further.
LGO Energy (LON:LGO) was also down, about 47% to 0.2p as the Trinidad-focused oil firm hoisted the for sale sign as part of a wide-ranging strategic review of the business designed to “maximise shareholder value”.
LUNCHTIME REPORT
Shares in under-pressure digital entertainment specialist InternetQ (LON:INTQ) rebounded on Monday after it rebuffed accusations made in an online blog.
The firm, which saw its share price almost halve last week, gave a line-by-line rebuttal of the posting, which made a number of allegations related to InternetQ's accounts and its business.
A number of allegations, including the way the company reports its operating costs and the value of recent acquisitions, were disputed in detail by the firm.
The response also addresses concerns about its ongoing operations, debt levels and cash generation.
It seemed to do the trick for investors, which bought back into the stock, sending the share price more than 12.5p, or 20%, higher to 74.6p.
In large-cap news, the FTSE100 was around 30 points higher at 6,267 with jet engine maker Rolls Royce (LON:RR.) leading the way.
Reports during the weekend suggested its major shareholder, US-based ValueAct, will be sitting down with bosses this week to discuss plans to revive its performance.
It is said the activist fund is lobbying for a seat on the board. Shares in Rolls Royce gained around 3.5%, or 20p, to 615p.
On the economic front, the market shrugged off a downbeat UK manufacturing survey.
Output fell for the fourth quarter in a row to the lowest since the third quarter of 2009, according to the study by the Engineering Employers Federation (EEF) and law firm DLA Piper.
Elsewhere, Friday's decision by Opec members to keep oil production output at record high levels has seen oil prices plummet again.
Sanjiv Shah, at Sun Global Investments, said: “The Opec meeting suggested that the organisation was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term.”
A barrel of Brent crude slipped 1.4% to US$42.37 while West Texas Intermediate spilled more than 2% to US$39.15.
At the bottom of the FTSE100, Royal Dutch Shell (LON:RDSB) dropped 2.7% to 43p to 1,556p, while BP (LON:BP.) eased 2% to 7p to 352p.
Also lower was B&Q owner Kingfisher (LON:KGF) which was lowered to a ‘reduce’ rating from ‘neutral’ by Nomura.
The broker said this was to “account for the possibility of no cash return in 2016, higher capex, limited reduction in development market losses and additional central costs.”
In small-caps, Kenmare Resources (LON:KMR) led the risers as it ended talks with Illuka Resources.
Its largest shareholders would not back the deal, but the firm also noted that it is hoping to conduct a US$175mln rights issue.
SGRF, a sovereign wealth fund from Oman, has agreed in principle to invest US$100mln subject to other shareholders committing to invest an extra US$75mln. Shares jumped 67.8% to 0.7p.
Also higher was Independent Oil & Gas (LON:IOG), which secured funding of around £4.75mln for an appraisal well on the Skipper field in the North Sea. Shares gushed 31% to 7.4p.
Conversely, LGO Energy (LON:LGO) dropped around 18% to 0.3p as the Trinidad-focused oil firm hoisted the 'For sale' sign as part of a wide-ranging strategic review of the business designed to “maximise shareholder value”.
MARKET OPEN
Traders shrugged off a dowbeat report on UK manufacturing to push the FTSE 100 Index higher on Monday.
Output fell for the fourth quarter in a row to the lowest since the third quarter of 2009, according to the study by the Engineering Employers Federation (EEF) and law firm DLA Piper.
Basic metals and electricals led the falls as the steel industry took a hit in the UK, but the automotive and chemical sectors were still positive on output.
The export picture deteriorated further, with less optimism about European markets and almost 60% of those surveyed citing no improvement in demand in any main market.
The domestic situation became less supportive, with UK orders racking up another negative quarter. Confidence about the UK economic outlook in the next year also took a knock.
But dealers took their cue from Asian markets, which got an overnight boost from solid US job data on Friday, with Japan’s Nikkei up just under 1%.
The Footsie rose 30.9 points to 6269.19 while the Cac-40 in Paris lifted 42 points and the Dax in Frankfurt gained 142 points.
In the markets, oil and energy stocks lost ground after Middle East oil cartel Opec failed to cut output at a meeting on Friday.
BP (LON:BP.) fell 7.2p or 2% to 352.5p and Royal Dutch Shell (LON:RDSB) shed 25.5p or 1.6% to 1574p. Cairn Energy (LON:CNE) backtracked 2.9p to 141p.
Medical group Collagen Solutions (LON:COS) was 0.12p healthier at 9.25p after announcing a deal to supply BBI Solutions with medical grade collagen.
Life science firm Optibiotix Health (LON:OPTI) dropped 1.5p to 77p on news of a £1.5mln fundraising.
Allergy Therapeutics (LON:AGY) ticked up 0.38p to 32.5p as the hay fever specialist enrolled its first patients in a US phase II trial of grass allergic rhinitis product GMM.
MARKET PREVIEW
The FTSE 100 is set to open its weekly account in positive territory, taking its cue from Asia’s main markets overnight.
The region’s markets were buoyed by some solid jobs data from the US on Friday, with Japan’s Nikkei up just under 1% and the Hang Seng ahead 0.25%.
The Shanghai Composite marked time ahead of a busy week for China with data on trade, consumer and producer sentiment, industrial production and retail sales expected.
It is fair to say by the end of week we will have a better a good idea to the health or otherwise of the world’s second largest economy.
The most notable market movement was that of oil, with US crude darting below the US$40 a barrel mark (it hit US$39.51) before staging a mini recovery. Brent hovered around US$43 a barrel.
OPEC’s decision on Friday to leave the spigots open acted as the depressant, with the Saudi-led cartel showing no signs of folding in this high stakes game of poker.
Against this backdrop, the market analysts expect UK quoted oilers and oil service firms to be in reverse gear.
Even so, the spread betting firms still see the FTSE 100 advancing around 46 points to 6,284.29 at the open.
Looking to the week ahead, the Bank of England begins its two-day meeting on Wednesday, but is unlikely to rock the boat by keeping UK base rates on hold at 0.5%.
On the corporate front it looks to be a very quiet week with Costa Coffee owner Whitbread and online grocer Ocado the pick of the bunch.
Other markets
Gold – 30 cents lower at US$1,084.20.
Currency – the pound is worth US$1.51.