Fresh fears that Greece and Portugal will sink under the weight of their debts saw London’s leading shares index fall further from a six-month high yesterday.
The FTSE 100 Index fell 28.9 points to 5,723 as investors became increasingly jittery about the lack of progress being made between Greece and its lenders to write off a huge chunk of its debts to avoid a default.
There was a strong start to the session as strong results from iPhone maker Apple smashed expectations and offset a bleak forecast by the International Monetary Fund in its world economic outlook.
But a worse than expected 0.2% fall in UK gross domestic product in the final quarter of 2011 added to the gloom and fuelled fears of another recession.
Banks were among the biggest losers, with Lloyds Banking Group down 2%, or 0.8p at 30.9p, Royal Bank of Scotland off 0.3p at 26.8p and Barclays 1.3p lower at 217.3p.
Other fallers included Carnival off 47p at £19.43, SSE down 29p at £12.24, Tesco 7.2p lower at 332.9p and Marks and Spencer off 1.7p at 329.4p.
The biggest Footsie risers included Ashmore Group up 15p at £3.70, Eurasian Natural Resources 20.5p higher at 731.5p and Weir Group ahead 37p at £19.64.
Chip designer Arm Holdings gained 3%, or 17.5p to 597.5p as many of its products are featured in Apple devices.
Elsewhere, retailer WH Smith was 4%, or 22p higher at £5.54 after it said profits were not dented in the tough trading conditions.
Halfords added 10.5p to 318.5p, while engineering group Renishaw surged 11% to the top of the FTSE 250 – up £1.28 to £12.83 – after an upbeat outlook overshadowed a 11% drop in first-half pre-tax profits.
Steve McKay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Aggreko ahead 1.37% at £20.79, STV Group off 2.67% at 91p and Nautical Petroleum falling 4.63% to 319.875p.