January 27, 2015 / 9:07 AM / in 4 years

FTSE slips from four-month high; banks weigh

LONDON (Reuters) - Britain’s blue-chip equity index ended lower on Tuesday after an eight-session run to a four-month high, with banks slipping on concerns the Greek crisis could spread and miners tracking weaker metals prices.

A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth

Mid-cap oil producer Afren AFRE.L plunged 71 percent after saying it was in talks with its largest bondholders over its liquidity and funding needs.

The benchmark FTSE 100 index .FTSE ended 0.6 percent lower at 6,811.61 points, also reacting to UK data showing gross domestic product (GDP) grew more slowly than expected in the last quarter of 2014.

“UK markets were hit by broad-based selling after UK growth estimates slipped ... with banks leading the declines under threat of a looming crisis in Greece spreading across the financial system,” Jasper Lawler, analyst at CMC Markets, said.

The UK banking index .FTNMX8350 fell 1.2 percent, tracking a 11.7 percent fall in Greek banks .FTATBNK to a record low, on worries Greece’s new anti-bailout government would clash with the European Union over the nation’s debts.

Barclays (BARC.L), Royal Bank of Scotland (RBS.L) and HSBC (HSBA.L) dropped 0.5 to 1.8 percent, with traders citing news of UK banks facing hefty mis-selling claims as one reason for their weakness.

Around two million Britons who may have been mis-sold insurance to cover events such as credit card fraud will be asked to vote for a scheme that could cost banks hundreds of millions of pounds in compensation.

The UK mining index .FTNMX1770 fell 0.4 percent as copper prices CMCU3 dropped 2.8 percent on concerns of slowing growth in China, weak U.S. business investment and rising metal inventories. Aluminium prices CMAL3 were down more than 1 percent.

The UK Oil and Gas index .FTNMX0530 also fell, down 0.4 percent.

“Oil prices are causing a great concern for some investors. People are getting into the mindset that there isn’t going to be a quick fix,” David Battersby, investment manager at Redmayne-Bentley, said, referring to the slump in crude prices.

Centrica (CNA.L) climbed 4.2 percent to 280.08 pence after Credit Suisse raised its stance on the stock to “outperform” from “neutral” and increased its target price to 310 pence from 290 pence.

Additional reporting by Alistair Smout; Editing by Mark Potter/Ruth Pitchford

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