FTSE Ends 2007 Lower; Worst Performance Since 2002

Heavyweight oil stocks were the worst performers on Monday, with BP down 0.7 percent and Royal Dutch Shell shedding 0.8 percent.

Britain's FTSE 100 index fell on Monday, ending a year overshadowed by credit crisis and market turmoil with gains of 3.8 percent -- its worst performance since 2002.

The FTSE 100 index closed down 0.31 percent on the day at 6,456.9 in thin volumes and in a shortened session, before the market closes on Tuesday for New Year's Day.

Heavyweight oil stocks were the worst performers on Monday, with BP down 0.7 percent and Royal Dutch Shell shedding 0.8 percent.

Miners tracked metal prices lower. BHP Billiton and Rio Tinto fell 1 percent and Anglo American shed 0.6 percent.

"We realise it's been a volatile year, we probably anticipate that 2008 is going to be a similarly volatile year but we believe there's enough to be positive about in relation to things like cheap valuations that allows us to be still overweight in equities in 2008," said Henk Potts, a strategist at Barclays Stockbrokers.

"We believe the FTSE is going to rise by 6.5 percent next year and are expecting outperformance coming through from the mining sector and the banking sector."

Banks, which bore the brunt of the credit crisis that shook markets this year, also fell. HSBC fell 0.3 percent, Lloyds TSB shed 0.7 percent and Barclays lost 0.5 percent.

Troubles in the U.S. subprime mortgages spilled over into the credit market earlier this year sapping liquidity and pushing major central banks to intervene to keep the wheels of the global economy running smoothly.

The DJ STOXX banking sector index ended the year nearly 17 percent lower -- its worst performance since 2002.

But rising commodity prices helped heavyweight oil and mining stocks to brave some worries that slowing global economic growth could dent appetite for commodities.

The base metal sector ended the year up around28 percent while the oil sector closed 2007 up more than 7 percent.

GlaxoSmithKline and AstraZeneca slipped 0.2 and 0.5 percent respectively on Monday after the drugmakers said Britain's Serious Fraud Office had asked them to hand over confidential documents, following allegations bribes were paid to win contracts in Iraq.

Friends Provident advanced 2.8 percent, to become the FTSE's best percentage performer. The Sunday Times said Friends Provident is putting the finishing touches to a strategic review, which is likely to lead to a sale of all or part of the life insurer.