Leading shares lost early gains as Wall Street opened sharply lower, hit by the continuing slide in the oil price.

With Goldman Sachs predicting crude could hit $42 a barrel this year and slashing its average forecast for the year from $83 to $50, Brent crude fell more than 4% to $47.8 and put energy shares under renewed pressure.

So with the Dow Jones Industrial Average down around 70 points by the time London closed, the FTSE 100 finished up just 0.28 points at 6501.42. Before US markets opened, the FTSE had climbed as high as 6542. European markets managed to hold onto most of their gains, but still closed well off the day’s peaks.

In the UK energy groups were also hit by Labour’s threat to force price cuts if the party gained power in the forthcoming election. SSE slid 92p to £15.03 and Centrica closed 7.8p lower at 261p. Among the oil companies Royal Dutch Shell B shares lost 33.5p to 2126.5p, BP dipped 2.1p to 396.55p and BG dropped 30.1p to 800p, while pump maker Weir, which supplies the oil industry, was down 44p to £17.23.

But travel businesses benefited on the hopes of cheaper fuel costs, with Carnival cruising 47p higher to £30.63 and British Airways owner International Airlines Group adding 3.9p to 469.3p.

ITV dipped 1p to 212.5p after analysts at Berenberg moved from hold to sell, with a target price of 184p. The bank said ITV faced a number of significant challenges in 2015, which have not been well anticipated by the market:

● Online video is eating US broadcast: We have written at length about this in the past, and proved too early in our prediction that online video will begin to cannibalise TV advertising revenues. However, US broadcasters are (finally) feeling that pain, and admitting that it’s only going to get worse from here. We do not think Europe will be any different, other than in terms of timing. We do not expect downgrades for the UK right now, but we do think investors will de-rate European broadcasters as they anticipate the same trends crossing the pond.

● ITV’s audience share in 2014 was poor: Not only was ITV1 down, the digital channels also lost share of commercial audience, despite the fact that total UK multi-channel gained share, and that ITV launched two new digital channels. This is a poor result, and one that ITV needs to fix, particularly as it faces potentially stronger competition from Five (now owned by Viacom), and from online video in general.

● Regional advertising potentially threatened: While Sky’s Adsmart is still small-scale in nature (it has run around 500 campaigns), it is growing. With P&G looking to buy more of its media programmatically, and other advertisers pursuing a similar tech strategy, Adsmart is in a sweet spot. The launch of regional advertising, when rolled out at scale, could potentially threaten ITV’s monopoly on regional advertising.

● Football rights pressures: With such weak audience share despite the World Cup, ITV needs to find something to replace Champions League. It has been widely reported that ITV plans to bid for Premier League highlights (currently held by the BBC). However, these rights cost around £60m per annum today, versus £50m for Champions League, and we expect substantial cost inflation. This suggests to us that content costs will rise.

● We also believe that there is a strong likelihood that ITV senior management may leave in the course of this year. With structural challenges ahead, we believe that the company requires substantial reinvestment in the business, and that current management’s cost-cutting approach will not play well with that requirement.

Standard Chartered dropped 23.9p to 921.2p as Credit Suisse said the bank’s exposure to weak commodity prices could mean it might have to make extra provisions of up to $4.4bn, and raise up to $6.9bn by the end of the year to improve its capital ratios. Either that, or cut shareholder payouts. Credit Suisse said:

We do not see this as an attractive valuation, unless accompanied by a more convincing and decisive change of strategy addressing profitability issues. We reiterate our underperform (target price 880p) and believe asset quality pressures will warrant capital measures such as further equity raising and/or imminent dividend reductions.

But GKN accelerated 10.7p to 348.5p after a positive note from the same bank, while Randgold Resources rose 89p to £50.20 as gold edged higher on its attraction as a haven in the current volatility..

Shire slipped 40p to £47.01 as it unveiled its planned $5.2bn purchase of US group NPS Pharmaceuticals.

Among the mid-caps, AO World added 15.4p to 262.5p following an upbeat quarterly trading statement which took in the key Black Friday and Christmas periods.

Lower down the market UTV Media added 3.75p to 188.5p after Friday’s late announcement it was considering the sale of some of its UK independent radio stations (not including talkSport). In a buy note, Peel Hunt said:

A surprise [announcement] on Friday suggests UTV Media may be eyeing an exit from UK local commercial radio (not to include talkSport). We suggest a valuation of around £30m, although near-term dilution is still likely. But a sale would improve group focus, and usefully lower leverage at time of ambitious launch of UTV Ireland.

Finally Earthport was unchanged at 45.25p despite a deal to supply some of its international payments services to Santander UK.