The FTSE struggled for direction as commodity markets dropped from yesterday’s lofty heights, with a sharp fall in the oil price hitting energy stocks.

The blue-chip index was broadly flat at 7,606, seesawing in and out of the red as Brent crude tumbled 5.6% to $115 a barrel having pushed past $123 yesterday after the EU announced it would block more than two-thirds of Russian oil imports.

Susannah Streeter, senior investments analyst at Hargreaves Lansdown, said the rollercoaster commodity market was due to fluctuating expectations on supply of oil.

‘The slide comes amid speculation that the oil cartel Opec could eject Russia temporarily, potentially setting the scene for other big producers to pump more oil,’ she said.

‘While there is no official policy laid out, the price rise is a reaction to reports that some members are looking to ramp up production and could use more of their spare capacity if Russia falls out of the agreed quotas being set.’

However, Opec has warned it will not be able to replace all of the volume lost from sanctions on Russia.

‘Although this dip in the oil price will come as a relief following the seemingly relentless rises over the past two weeks, red hot inflation is still front and centre of many investors’ minds,’ said Streeter.

Energy and commodity players followed the oil price downwards, with National Grid (NG) slipping to the bottom of the main index after its shares fell 3.4%, or 40p, to trade at £11.30. It was followed by:

• Harbour Energy (HBR) down 2%, or 8p, at 376p;
• Fresnillo (FRES) falling 1.6%, or 13p, at 761p;
• And Anglo American (AAL) off 1.3%, or 52p, at £38.34.

The FTSE 250 managed to eke out an early gain this morning, up 0.2%, or 48 points, at 20,466. Mid caps were pushed higher by Dr Martens (DOC) which rocketed 25%, or 55p, to 271p after the footwear brand announced a near quadrupling in pre-tax profit to £214m in the year ending March, prompting it to raise revenue growth guidance for 2023 to the ‘high teens’. The company sold 14.1m pairs of shoes last year, up 1.4m on the previous year.

Frasers (FRAS) was up 1.4%, or 10p at 701p after announcing it had purchased fashion brand Missguided out of administration for £20m in cash. The owner of Sports Direct and House of Fraser has snapped up the intellectual property of the fast fashion brand after it ran into difficulties during the pandemic and attempts at a sale floundered. 

Russ Mould, investment director at AJ Bell, said: ‘In the end Mike Ashley’s Frasers swooped for the collapsed women’s online fashion outfit Missguided.

‘Time will tell if the name of the acquisition will prove prophetic. Though Ashley, for all his detractors, has a way of making the brands he has snared in the past work.’

Among investment companies, Impact Healthcare Reit (IHR ) rose 3.5% to 123.2p from a 10% premium on news of a £25m purchase of a dementia nursing home and two old people’s homes in Devon and Somerset let to Welford Healthcare, an existing tenant.

International Public Partnerships (INPP ) gained 1% to 168p on a 13% premium after the infrastructure fund agreed to pay £40m to lift its stake to 18% in the 25km Thames tideway tunnel ‘super sewer’. INPP currently holds 16% in the project that is due to complete in 2028 and will pay it long-term, predictable revenues over the course of what could be a 120-year life.