FTSE flat as US consumer confidences offsets Euro fears

London’s leading index was broadly flat today as fears over Europe’s banks were offset by a strong consumer confidence survey on the other side of the Atlantic.

FTSE flat as US consumer confidences offsets Euro fears

London’s leading index was broadly flat today as fears over Europe’s banks were offset by a strong consumer confidence survey on the other side of the Atlantic.

The FTSE 100 Index closed less than 2 points ahead at 5351.5 as Bankia, the fourth largest lender in Spain, said it would meet with Government officials tomorrow to discuss bailout support.

The market had spent much of the day in the red but was lifted again after the University of Michigan consumer sentiment index was revised upwards in May to its highest level in four years.

London’s leading shares index has had a volatile week, closing 1.5% higher yesterday, but finishing Wednesday 2.5% lower, as eurozone problems remained firmly in the spotlight.

Bankia’s woes made sure the wider eurozone crisis never strayed from focus and saw the euro slide against most major currencies, including the pound at 1.25. Sterling was down against the US dollar, however, at 1.56.

The Spanish government, which has already taken a controlling stake in Bankia, said this week it would pump at least €9bn into the lender but added that more would be available if needed.

The scale of the crisis was underlined as top European Central Bank official Peter Praet warned countries in the eurozone needed an “urgent overhaul” of their banking and financial system.

The crisis at Bankia hit Britain’s banking stocks with Barclays 3.6p lower at 181.7p, Royal Bank of Scotland dropping 0.6p to 20.9p and Lloyds Banking Group losing 1.1p to 25.8p.

Aviva closed higher after Exane BNP Paribas upgraded the stock to outperform and said it believed shares were too cheap after a recent poor run.

Shares were 0.4p higher at 268.4p, despite the broker warning that it expected the insurer to cut its dividend. Fellow insurer Admiral also had a better performance, with shares rising 32p to 1116p.

However, trading volumes were light given an absence of major corporate news and the prospect of a bank holiday in the United States on Monday.

PC World and Currys owner Dixons Retail Group lost hold of earlier gains after it received the backing of its banks with a new £300m (€375m) lending facility.

The arrangement with its syndicate of lending banks will run until June 30, 2015 and replace a facility which had been due to mature next year. Shares had been 7% higher earlier in the session but closed 0.3p down at 13.9p.

Industrial services group Cape suffered a bloodbath on the FTSE 250 Index as its shares plunged 37% in the wake of a profits warning.

The group said it will take a one-off charge of £14 million after a review of a Liquefied Natural Gas project in Arzew, Algeria, revealed additional costs which are projected to produce a significant loss. Shares were down 118.5p at 205p.

The biggest Footsie risers were Admiral up 32p at 1116p, Aggreko ahead 50p at 2157p, Tullow Oil up 32p at 1395p and United Utilities ahead 12p at 649p.

The biggest Footsie fallers were Lloyds Banking Group down 1.1p at 25.8p, Vedanta Resources off 33p at 966.5p, Evraz down 9.4p at 299.3p and Royal Bank of Scotland off 0.6p at 20.9p.

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