FTSE slips 2.6% amid continuing concerns over Greece

The London market lost 2.6% today as world indices were battered by fresh fear over Greece’s debt woes amid concerns that other European nations could be swept up in the crisis.

The London market lost 2.6% today as world indices were battered by fresh fear over Greece’s debt woes amid concerns that other European nations could be swept up in the crisis.

Blue chips dived after ratings agency Standard & Poor’s downgraded Greece’s credit rating to junk status, while Portugal’s debt was also downgraded.

The FTSE 100 Index sunk 150.3 points to 5603.5 amid a global sell-off as fears over the economy worsened.

On Wall Street the Dow Jones Industrial Average fell over 1%, while in Europe the Cac 40 lost nearly 2.7% and Germany’s Dax was 2.4% lower.

Greece called for funds from a bailout package on Friday, but some European countries still have to approve the aid and fears are rising over whether the money will arrive before a May bond payment deadline.

The threat of Greek default has sent borrowing costs higher in other indebted European countries. S&P raised fears the crisis could spread to other nations by downgrading its credit rating on Portugal amid concerns about the country’s ability to get a handle on its debt.

The euro took a hammering as traders sought a safe haven in the US dollar, while the pound also fell back on the fresh European concerns. Sterling was down to 1.15 against the euro and slumped over 1% to 1.53 against the dollar.

In London, banking shares were under pressure amid the economic jitters and nervousness surrounding the Goldman Sachs hearing in the US. Even news of profits at part-nationalised Lloyds Banking Group failed to provide cheer.

Despite an early boost to Lloyds’ shares after it returned to the black for the first three months of the year, the lender ended the day down nearly 3%

The bank expects to report profits at both the half-year and full-year stage, but the firm – which is 41% owned by the taxpayer – slipped 2.07p to 68.17p.

Oil giant BP was also among the fallers despite saying first quarter profits more than doubled compared with last year, at $5.6 bn (€4.23bn), helped by rising crude oil prices.

Its results have been overshadowed by the continuing oil spill from a BP well in the Gulf of Mexico and shares were more than 2% lower – down 16.8p to 610p.

Only two firms made it onto the risers board and the overall sell-off saw them lose much of their momentum towards the end of the session.

Rival Royal Dutch Shell, which reports tomorrow, topped the leaders board, adding 9p to 1922p after an upgrade from brokers at JPMorgan Cazenove.

A stronger dollar hit metal prices and hurt heavyweight commodity shares, helping to drag the market lower.

Kazakhmys was one of the biggest Footsie casualties, losing 91p to 1389p, while Vedanta Resources shed 135p to 2660p.

The biggest Footsie risers were Royal Dutch Shell up 9p at 1922p and Imperial Tobacco which gained 6p to 1953p.

The biggest Footsie fallers were Man Group down 16.4p at 247.6p, Kazakhmys off 91p at 1389p, Rio Tinto down 197p at 3607p and Old Mutual down 6.1p at 112.8p.

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