Rising oil prices following the Saudi terror attacks pushed the London market into the red yesterday despite upbeat economic news.

Positive manufacturing and retail figures failed to offset the gloom, with the FTSE 100 Index closing down eight points at 4422.7.

Marks & Spencer led the climbers after a dramatic weekend of boardroom changes, putting it among the top two Footsie risers for the third consecutive session.

A survey by the Chartered Institute of Purchasing and Supply showed sustained growth in the manufacturing sector last month, in contrast to official figures last week.

A CBI survey also showed retail sales rising at their fastest rate for two years last month.

But the rising cost of a barrel of US light crude, which reached $41.5 yesterday, was preoccupying investors, after militants killed 22 oil workers in Saudi Arabia at the weekend.

Analysts said political uncertainty was likely to dominate the US investment agenda for much of this week.

The rising oil price took its toll on the aviation sector, with British Airways the second heaviest faller as investors factored in the impact of higher fuel costs. Shares fell more than two per cent, or 6p, to 248p.

Engine maker Rolls-Royce also felt the impact of falling confidence in airlines, losing 4p to close at 221p.

Marks & Spencer was top of the Footsie risers, climbing nearly two per cent, or 6p, to 365p, after the ailing retailer replaced chief executive Roger Holmes with former Arcadia boss Stuart Rose.

Analysts said the change would help M&S to defend itself against a takeover approach from billionaire Philip Green.

ICI had knocked M&S off the top spot during the morning after broker UBS upgraded the paint and chemicals group to "buy". Its shares were fourth in the index, rising 2p to 221p.

Oil producer BP was another major riser as investors looked forward to higher cash flows resulting from the surging cost of crude. Its shares were ahead 4p at 482p, although rival Shell was unchanged at 394p.

Outside the top flight, London and Dublin-listed airline Ryanair lost early gains, closing at its opening price of 4.34 euros after posting a fall in annual profits.

Engineering group Carillion lost ground, down more than 1p at 165p, despite saying it would receive £17.6m from Network Rail following the latter's decision to take rail maintenance in-house.

However, celebrity jeweller Theo Fennell was in the black as it hailed the success of its ranges at Selfridges and Harvey Nichols after annual sales jumped 23 per cent. Shares in the group climbed six per cent, or 1p, to close at 26p.