Reports that Standard & Poor’s will strip France of its AAA credit rating drove falls on world markets today.
The FTSE 100 Index surrendered earlier gains to fall 25.8 points to 5,636.6 after reports that talks on restructuring Greece’s debt have collapsed added to the gloom.
The falls were despite an encouraging Italian bond auction, which saw the debt-stricken nation’s borrowing costs fall, but some of the shine came off financial stocks after the US’s largest bank JP Morgan Chase revealed reduced fourth quarter earnings, setting the banks’ reporting season off to a bad start.
Royal Bank of Scotland had been up by as much as 8% earlier in the day as investors approved of its plans to cut 3,500 jobs as part of a restructuring of its investment arm, but its gains were reduced to 5%, or up 1.1p to 24.1p by the time the market closed.
Barclays was ahead 7.8p at 201.2p, HSBC was up 5.1p at 504.7p, and Lloyds Banking Group was 0.4p higher at 29.5p.
On the FTSE 250 Index, technology group Invensys saw its shares slump 19% or 43.9p to 183.2p after it warned a series of project delays would hit its full-year profits.
Ted Baker saw its shares rise 5% after it said it had strong sales in the run up to Christmas. Shares rose 32p to 732p.
The biggest Footsie risers included ICAP ahead 14.1p at 336.7p and Schroders ahead 27p at £11.16.
The biggest Footsie fallers were Fresnillo down 46p at £16.87, Vodafone off 4.5p at 175p, International Power down 7.5p at 334.5p and Tesco off 6.7p at 316.8p.
Alan Cockburn, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Cairn Energy rose 1.25% to 292.2p and STV Group increased 0.65% to 77p.
Fallers included Wood Group which declined 1.92% to 663.75p, while Stagecoach lost 1.1% to finish the day at 278.05p and SSE closed 0.95% lower at £12.51.