FTSE closes down amid continued eurozone fears

The London market lost ground today after an emergency summit between the leaders of France and Germany failed to ease fears over the eurozone crisis.

FTSE closes down amid continued eurozone fears

The London market lost ground today after an emergency summit between the leaders of France and Germany failed to ease fears over the eurozone crisis.

Traders were disappointed that French president Nicolas Sarkozy and German chancellor Angela Merkel did not give their backing to eurozone bonds to fix the current problems, instead calling for greater European integration.

The FTSE 100 Index fell 26 points to 5331.6 amid fears the measures they suggested were insufficient to stop the eurozone debt crisis from escalating.

The London market had been down by more than 1% but clawed back some of its earlier losses after the Dow Jones Industrial Average in the US made a strong start, at times gaining more than 0.5%.

Wall Street was boosted by results from retailers such as Target and Staples, which outweighed a rise in core factory gate inflation by 0.4% in July, the biggest increase since January. The overall producer price index rose 0.2 % last month.

The pound initially fell on currency markets after the minutes of the Bank of England’s Monetary Policy Committee (MPC) meeting in August revealed all nine members were united in calling for interest rates to be kept at record lows of 0.5%.

Two members of the committee dropped calls for a hike following weak economic data, reinforcing City expectations that rates are set to remain on hold for all of next year and possibly into 2013.

But sterling pushed back into positive territory in late trading, up at 1.66 against the dollar, and at 1.15 against the euro.

Financial stocks bore the brunt of the selling, led again by the banks. Barclays was down 7.7p at 174p, Royal Bank of Scotland dipped 1p at 24.8p, Lloyds Banking Group fell 0.4p at 32.8p, and HSBC was down 10.6p at 542p.

Inter-dealer broker ICAP and London Stock Exchange were also down 16.5p and 24.5p to 428p and 846p respectively amid fears that a proposed tax on EU financial transactions could hit trading volumes.

Miners were among the biggest risers, benefiting from a rise in commodity prices and a positive mood on Wall Street.

Silver miner Fresnillo was the biggest climber, up 6%, or 105p at 1966p, while mining and energy firm Eurasian Natural Resources was up 23.5p at 655p.

In corporate results, shares in Balfour Beatty fell 5% in the FTSE 250 Index after analysts expressed disappointment at figures showing a 5% drop in half-year underlying profits to £136m.

It also warned the infrastructure market will be tough for the next two years. Shares fell 13.9p to 249p.

Shares in regional airline Flybe dipped lower even though it said it flew more passengers and saw ticket revenues improve over the past three months. Shares fell 5p to 153p

The biggest Footsie risers were Fresnillo up 105p at 1966p, Eurasian Natural Resources ahead 23.5p at 655p, Antofagasta up 34p at 1262p, and GKN ahead 4.1p at 202.5p.

The biggest Footsie fallers were Standard Life down 10.9p at 201.5p, Barclays off 7.7p at 174p, IMI down 33p at 832.5p, and Royal Bank of Scotland off 1p at 24.8p.

More in this section

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Discover the

Install our free app today

Available on

Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up

HOME DELIVERY SERVICE

Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.