INVESTORS lost confidence in the prospect of a speedy resolution to the eurozone debt crisis yesterday, causing Britain’s leading share index to drop into the red.
The FTSE 100 index was up nearly 80 points in early trading amid optimism that a crucial EU summit this weekend would agree the recapitalisation of Europe’s banks and protect countries from Greece’s debt woes.
But it fell 29.6 points to 5,436.7 after a German government spokesman poured cold water on these hopes.
Financial stocks had been among the biggest beneficiaries from the earlier optimism, but saw their gains eroded as the sentiment turned sour.
Insurer Aviva was 1p ahead at 340p but had earlier been up 10.4p at 349.4p after an upgrade on the stock to “buy” from “neutral”. Legal and General was down 0.6p at 104.5p after it lost a 1.1p gain, while the Royal Bank of Scotland shed 0.2p at 24.1p having previously been up 0.7p.
Alan MacPhee, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Xcite Energy ended the day positively, gaining 3% to 126.5p while Faroe Petroleum rose 0.7% to 144.75p.
Among the fallers, Cairn Energy shed 2.7% to 290.7p and Weir Group lost 2.4% at £16.46.
Wood Group also closed the day in negative territory falling nearly 2% to 571p.