European markets down 1%

European markets slid more than 1% today as investors steered clear of riskier assets ahead of a key EU summit this week.

The FTSE 100 Index was down 53 points at 5460, with miners and banking stocks the biggest fallers amid fears the summit will not deliver a deal that will restore confidence in the future of the 17-country euro currency.

In the US. the Dow Jones Industrial Average was also about 1% lower in early trading, despite better than expected sales of new homes in May. And the Dax and Cac40 in Frankfurt and Paris respectively were down by around 2%.

Recent gloomy economic data from China hit miners, with big fallers including Rio Tinto, which declined 83.5p to 2897.5p and Kazakhmys off 25p at 677.3p.

Among financial stocks, Lloyds Banking Group was down 1p at 30.4p while Royal Bank of Scotland was off 6p to 237.3p on fears the IT meltdown at NatWest will land it with tens of millions of pounds in compensation and costs.

Pharmaceuticals company Shire was the biggest top flight faller, down 11% or 218.5p to 1747.5p, after US regulators approved generic copies of its hyperactivity drug Adderall XR.

Barclays reduced its price target on the stock to 2030p following the decision, despite Shire telling investors that it continued to expect good full-year earnings growth this year.

There was also a decline of 1% for Morrisons after its respected finance director said he planned to leave the business after nearly eight years in the role. Shares were 3.8p lower at 264.7p.

Richard Pennycook, who will depart by next June, is seen as a “safe pair of hands” by City analysts, with one describing his departure as an “unexpected disappointment”.

Fellow retailer Marks & Spencer fell 4.7p to 322.1p after the Financial Times reported another senior departure with the defection of menswear head Richard Price to Philip Green’s BHS.

The stock also fell on Friday after Exane BNP Paribas issued a note raising concerns about the amount of money spent by the chain on store modernisation and expansion.

Essar Energy, which is the new owner of the Stanlow refinery at Ellesmere Port, saw shares fall 8% in the FTSE 250 Index after it reported results broadly in line with market expectations.

Profits slumped nearly two-thirds to $129m in the 15 months to March 31 compared to the previous 12 months.

Shares were off 9.8p to 116p after the group booked a loss of $30.2m from Stanlow but said it was hopeful margins will improve at its new addition.