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UPDATE: Oil firms lead FTSE lower after U.K. vote on Syria8-30-13 12:15 PM EDT
 

By Sara Sjolin, MarketWatch

 

LONDON (MarketWatch) -- Oil firms led U.K. stocks lower on Friday, tracking oil prices, as the prospects of a military strike on Syria narrowed after the British Parliament voted against using force.

 

The FTSE 100 index dropped 1.1% to close at 6,412.93, sending it 3.1% lower on the month.

 

Weighing on the benchmark, Royal Dutch Shell PLC (RDSB) lost 1.3%, BP PLC (BP) fell 1% and BG Group PLC shaved off 1.5%.

 

The losses for the energy sector, came as oil prices retreated further on signs the West won't launch a military strike on Syria in the imminent future after the U.K. Parliament late Thursday rejected involvement in an intervention. In the U.S., however, officials said the Obama administration would be prepared to strike alone against Syria. Secretary of State John Kerry will make a statement about Syria at 12:30 p.m. Eastern Time on Friday, the State Department said.

 

Earlier in the week, crude-oil prices spiked to a more than two-year high on worries the U.S. would launch an attack on Syria after accusations the government used chemical weapons against rebels.

 

The downbeat sentiment also weighed on U.K. banks on Friday. Shares of Royal Bank of Scotland Group PLC (RBS) and HSBC Holdings PLC (HBC) both dropped 1.6% and Standard Chartered PLC lost 1.4%.

 

Food and drinks makers were further on the decline after Citigroup cut the European food and beverage sector to neutral from overweight.

 

Shares of Diageo PLC fell 1.4%, Britvic PLC erased 0.8% and Unilever PLC (UL) slipped 0.5%.

 

Outside the main index in the U.K., Bwin.Party Digital Entertainment PLC sank 14% after the online gambling firm warned that full-year revenue could fall as much as 17%.

 

On a more upbeat note, shares of Vodafone Group PLC (VOD) advanced 0.7%, building on a 8.2% gain from Thursday. The upbeat moves came after the telecom firm confirmed it is in talks with Verizon Communications Inc. (VZ) to sell its 45% stake in their joint venture, Verizon Wireless.

-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com

 

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(END) Dow Jones Newswires

08-30-13 1215ET

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