Debt concerns weigh on FTSE

The FTSE 100 Index slipped further below the 6000 mark today as heavily-weighted banking stocks suffered from renewed European debt concerns.

Barclays and Royal Bank of Scotland were among the biggest losers in London after Ireland said it will ask to reduce the interest rate on its emergency loan and high level talks began over Portugal’s bail-out.

The negative sentiment in Europe combined with global inflationary concerns to depress the blue chip index 62.1 points to 5934.

Tokyo’s Nikkei 225 slid overnight amid caution ahead of the corporate reporting season and following news the Japanese nuclear crisis could last for up to nine months.

Banking stocks were pushed downwards as fears remained over the ability of Greece and Ireland to service their debts while there were also doubts as to whether Portugal’s bail-out would be approved.

Barclays, which has high exposure to the Iberian peninsula, dropped 7.2p to 294.5p, and Royal Bank of Scotland which is a major lender in Ireland, fell 0.7p to 42p. Lloyds Banking Group was also down 1p to 59.1p.

The negative sentiment also helped to weigh down miners and energy companies, with Essar Energy off 9.8p at 438.8p and Fresnillo down 32p at 1543p.

Medical devices firm Smith & Nephew was one of the biggest top tier fallers, on concerns any takeover interest from US healthcare group Johnson & Johnson may have been scuppered by its talks to buy Synthes. S&N fell 3%, or 23.8p to 673p.

ITV topped the risers board after it received an upgrade from Jeffries, helping it rise 1.4p to 75.1p.

There was also some positive news for retailers as they recouped some of their recent losses after B&Q owner Kingfisher received an upgrade from Bank of America Merrill Lynch. Kingfisher rose 2.7p to 268.1p, while Next was up 5p to 2210p.

Elsewhere, oil explorer Desire Petroleum plunged 55%, down 22.4p to 17.6p, after it failed to find oil at its Ninky well off the Falkland Islands.

And on the Alternative Investment Market, Crosby Asset Management saw its shares soar 56%, or 1.8p to 5.07p, after it emerged that the son of Russian billionaire and Chelsea Football Club owner Roman Abramovich was investing in the company.

Arkadiy Abramovich has taken a 26% stake in the company, which aims to buy up oil and gas assets, through his investment vehicle ARA Capital.