Strengthening Oil Stocks, Continued Weakness of Financials Predicted

The market value of blue chip companies has weathered the credit crunch better than their smaller rivals, Fidelity advised investors today.

According to new analysis from the firm, the top ten companies on the FTSE 100 - which is itself an index of the hundred biggest listed firms in the UK - now take up 49 percent of its total market value. Prior to the onset of the credit crisis, this figure stood at just 45 percent.

However, these results have been skewed slightly by Barclays, HBOS and RBS all falling out of the top ten in recent months. Financial firms have been particularly badly hit by the crunch, and are anticipated to recover their places when the crisis passes.

Overall, the banking sector takes up 16 percent of FTSE's value, down from 20 percent. By contrast, the energy and mining sectors have benefited from big rises in prices - and have grown to take 20 percent and 13 percent respectively.

The firm which has benefited the most from the crunch is mining giant Rio Tinto, whose share price is up 60 percent. Just behind are the British Energy Group and BG group, up 57 and 42 percent respectively.

Offering additional advice for investors Tom Ewing, a fund manager at Fidelity, commented: "Whilst the fall in bank stocks has been precipitous, I believe the lack of visibility over earnings in 2009 and likelihood of increased regulation going forward makes a sustained rebound unlikely.

"The outlook for the oil stocks, however, looks more promising…earnings and dividend streams for oil majors look very robust. This makes it difficult to see them losing their dominance in the FTSE for some time to come".