London Markets: FTSE 100 sheds gains as oil, mining stocks drop

LONDON (MarketWatch) The U.K.s benchmark stock index erased an earlier gain and finished sharply lower Monday, with oil shares pulling back and mining companies falling further.

The FTSE 100 UKX, -1.87% closed down 1.9% at 6,182.72, its sixth consecutive loss and lowest close since June 2013, according to FactSet data.

An earlier rise for the benchmark was supported by gains among oil and gas shares as oil prices had been turning positive. But those moves fell apart, with West Texas Intermediate crude-oil futures CLF5, -0.70% falling below $57 a barrel. Brent crude futures LCOF5, -0.82% returned below $62 a barrel.

There was an element of misplaced optimism in early trade as (Brent Crude) oil found some buyers at $60/bbl this helped to lead indices higher with many falsely caught long on what was essentially some profit taking on last weeks sell off, offered Brenda Kelly, chief market strategist at IG, in emailed comments.

Among oil majors, BP PLC BP., -3.22% fell 3.2% and Royal Dutch Shell PLC RDSB, -2.09% lost 2.1%.

After ranking at the top of the FTSE 100 earlier Monday, Tullow Oil PLC TLW, -2.31% shares fell 2.3% and BG Group PLC BG., -2.92% gave up 2.9%, with the shares suffering in recent sessions as oil prices have tumbled to five-year lows due to oversupply concerns.

The oil and gas group last week dropped more than 3%.

The London benchmark also turned lower along with the broader European market on Monday, with Russian stocks and the ruble sliding further against the U.S. dollar. Russias central bank said Monday it expects a deeper economic contraction if oil prices stay at the $60-a-barrel level.

Miners BHP Billiton PLC BLT, -3.70% BHP, -2.23% BHP, -3.21% and Rio Tinto PLC RIO, -2.46% RIO, -2.58% RIO, -1.59% came under further pressure as the session wore on, down by 3.7% and 2.5%, respectively. BHP was downgraded at RBC Capital Markets to underperform from sector-perform.

Separately, Australia on Monday projected iron-ore prices will trade around $60 a metric ton, much lower than its previous estimate of $92 a metric ton.

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London Markets: FTSE 100 sheds gains as oil, mining stocks drop