Banking shares fell sharply today after the European Central Bank dashed hopes it would take a bigger role in tackling the region’s debt crisis.
While ECB president Mario Draghi unveiled a package of measures designed to help contain the crisis, including a cut in interest rates, he ruled out further bond buying that would lower borrowing costs for indebted governments.
The FTSE 100 Index closed 63.1 points lower at 5,483.8, having been nearly 60 points higher earlier in the session.
Lloyds Banking Group surrendered recent gains to finish 2p lower at 25.1p, while Royal Bank of Scotland was 1.2p lower at 20.9p and Barclays dropped 6.95p to 180.4p.
In corporate news, attention was focused on supermarket Tesco after it reported a 0.9% drop in like-for-like sales for the UK in the third quarter. Shares initially fell before steadying to close 0.3p higher at 397.2p.
Luxury goods firm Mulberry continued to impress the City after reporting pre-tax profits of £15.6million, leading shares 6p higher at £15.
The biggest FTSE 100 Index risers were British American Tobacco up 45.5p at £30.15, Morrisons ahead 2.7p at 318.2p, BT Group up 1.6p at 191.7p and GlaxoSmithKline ahead 12p at £14.40.
The biggest fallers included Essar Energy off 15.6p at 226.1p and IMI off 34.5p at 737p.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Johnston Press added 4.71% to close the day at 5p, AG Barr rose 2.53% to 1,215.5p and Premier Oil gained 0.43% to finish at 375.3p.
On the faller’s board, Amec dropped 3.56% to 906.5p, Wood Group declined 3.5% to 648p and BG Group closed 3.09% down at £13.32.
