FTSE under pressure as Dow Jones opens well

The FTSE 100 Index pared back early losses today, but remained under pressure amid investor caution.

A positive open on America’s Dow Jones Industrial Average helped the Footsie regain its poise, recovering from a near-2% fall to stand 34.5 points down at 5091.5.

The London market got off to a poor start in the wake of Friday’s shock US jobs figures and due to concerns over debt contagion across Europe.

Japan’s Nikkei 225 dived by almost 4% and the Hang Seng fell 2% in Hong Kong.

Anxiety over Europe’s debt crisis added to the US jobs concern after Hungarian officials signalled last Friday that the nation was at risk of a Greek-style fiscal crisis. The country is a European Union member but does not use the euro.

The single currency hit a new four-year low against the dollar over the weekend. It also lost further ground against the pound, which is trading at nearly 1.22 – its highest level since November 2008.

Oil prices have slumped to near $70 a barrel after last week’s poor jobs data cast recovery doubts over the world’s biggest economy.

This put pressure on Royal Dutch Shell, which slipped 10.5p to 1729.6p.

BP was also in the red, down 2.8p at 430.6p, after a Goldman Sachs downgrade saw it lose earlier gains of almost 3%.

The group had been enjoying much-needed gains after reporting some progress in its efforts to stem the Gulf of Mexico oil spill, although the Goldman blow saw the stock resume its downward descent.

BP said its latest attempt to control the leak captured 16,600 barrels of oil in its first three days of operation. The update came as BP said the cost of clean-up and containment efforts has reached more than $1.6bn (€1.3bn) so far.

The renewed double-dip recession fears meant mining stocks dominated the fallers board, with Kazakhmys off 35p at 1084p and Xstrata down 18.9p to 932.3p.

Elsewhere, continued boardroom uncertainty cast a shadow over strong trading figures from insurer Prudential.

In an update ahead of its annual meeting, the Pru said growth accelerated in April and May and led to a 27% rise in sales to £1.35bn (€1.6bn) for the first five months of the year.

Shares were 14.5p lower at 541.5p as investors continued to speculate about potential management changes following the group’s failure to complete its multi-billion acquisition of AIG’s AIA division.