Euro fears spark fall for FTSE

Fresh fears that Greece and Portugal will sink under the weight of their debts saw London's leading shares index fall further from a six-month high today.

Investors became increasingly jittery about the lack of progress being made between Greece and its lenders to write off a huge chunk of its debts to avoid a default.

And with Portuguese borrowing costs soaring to unsustainable levels amid fears it will fail to keep up with its debt repayments, the FTSE 100 Index fell 28.9 points to 5723.

The market had been ahead earlier in the session as strong results from iPhone maker Apple smashed expectations with a doubling in its net profit to £13.06bn (€9.97bn) in the last quarter.

This distracted from a bleak forecast by the International Monetary Fund (IMF) in its world economic outlook.

The organisation warned that global output will expand at 3.25% this year, a downward revision from 4%, with the UK growing at just 0.6%, down from a previous forecast of 1.6%.

But a worse than expected 0.2% fall in UK GDP in the final quarter of 2011 added to the gloom and fuelled fears of another recession.

The Dow Jones Industrial Average in the US and France's Cac-40 were also down as the London market closed.

The pound was up against the euro at 1.20 as jitters over Greece hit the single currency. But sterling was down at 1.56 against the dollar.

Banks were among the biggest losers in London amid the eurozone fears, with Lloyds down 2%, or 0.8p at 30.9p, Royal Bank of Scotland off 0.3p at 26.8p and Barclays 1.3p lower at 217.3p.

Chip designer Arm Holdings posted one of the biggest rises of the session - up 3% or 17.5p to 597.5p - as many of its products are featured in Apple devices.

Elsewhere, shares in retailer WH Smith were 4% higher as it said that its profitability had not been dented in the tough trading conditions.

Same-store revenues were down by 6% on the high street in the 21 weeks to January 21 but with margins showing improvement the stock improved by 22p to 554p.

Other retailers on the front foot included Halfords, which added 10.5p to 318.5p, while Marks & Spencer was 1.7p off at 329.4p.

The biggest Footsie risers were Ashmore Group up 15p at 370p, Arm Holdings ahead 17.5p at 597.5p, Eurasian Natural Resources up 20.5p at 731.5p, and Weir Group ahead 37p at 1964p.

The biggest Footsie fallers were Lloyds down 0.8p at 30.9p, Carnival off 47p at 1943p, SSE down 29p at 1224p, and Tesco off 7.2p at 332.9p.