FTSE: 5,923.53 (–73.23) Mid-250: 11,521.94 (–130.47) Small Cap: 3,242.70 (–20.06)UK STOCKS dropped for a fourth day yesterday, the longest losing streak for the benchmark FTSE 100 Index since August, as oil surged to a 28-month high after Libyan leader Muammar Gadafy vowedto fight a growing rebellion.

The FTSE 100 fell 62.65, or 1.04 per cent, to 5,934.11.

The four-day slide has pared this year’s advance to 0.4 per cent amid speculation political instability in the Middle East will cause higher inflation, weakening the economic recovery and curbing earnings.

“The rise in oil prices could tip the economy into a significant period of sub-par growth,” Gerard Lane, an equity strategist at Shore Capital Group in Liverpool wrote in a report yesterday.

“We find ourselves less convinced about the robustness of the US economy, and as such suggest that the equity market may suffer weakness, as it did in the second quarter in 2010,” he said.

Libya, the holder of Africa’s largest oil reserves, is the latest nation to be rocked by protests ignited by last month’s ousting of Tunisia’s president and fanned by the February 11th fall of Egyptian president Hosni Mubarak.

Bank of England policy maker Spencer Dale joined Andrew Sentance and Martin Weale in voting for an interest-rate increase this month as a split widened on the dangers of inflation at double their target, according to minutes of the February 10th decision published yesterday.

BHP Billiton, the world’s largest mining company, lost 3.1 per cent to 2,337.5p and Antofagasta sank 5.1 per cent to 1,313 p.

Copper fell to a four-week low on speculation that unrest in North Africa and the Middle East will derail recovering economies as oil prices jump.

Logica sank 5.4 per cent to 137.5p, the biggest decline since July. Pre-tax profit more than quadrupled to £193 million in 2010, missing the average analyst estimate in a Bloomberg survey of £240 million.

Rexam slid 5.8 per cent to 348.4p even after the world’s biggest beverage-can maker reported full-year net income of £124 million, compared with a net loss of £29 million a year earlier.

Cable and Wireless Communications rallied 6.2 per cent to 49.33p, the biggest gain since 2008, after agreeing to sell its operating business in Bermuda for $70 million and saying it will buy back up to $100 million of shares. – (Bloomberg)