World markets were pegged back today after Standard & Poor’s warned it could downgrade Europe’s bailout fund as well as the credit ratings of 15 eurozone countries.
S&P said it was putting the AAA long-term credit rating for the European Financial Stability Facility on watch with “negative implications”.
In London, the FTSE 100 Index finished just one point higher at 5,568.7 after the move.
Banking stocks were on track for a strong session until S&P’s announcement on the bail-out fund limited the rise at Lloyds Banking Group to 0.1p to 27.1p, while Royal Bank of Scotland was 0.2p lower at 22.6p.
HSBC was 9.7p lower at 508.3p after broker Seymour Pierce expressed disappointment that the bank had been the subject of a mis-selling fine from the FSA on Monday.
In a thin session for corporate news, building supplies firm Wolseley topped the FTSE 100 Index risers board after a first quarter trading update showed a 16% rise in trading profits to £185million. Shares were 69p higher at £19.72, a gain of 4%.
There was a disappointing session for retailers after industry figures fuelled concerns about prospects over the Christmas trading season. The British Retail Consortium said like-for-like sales were down 1.6% in November during the worst month for the sector since May.
Marks & Spencer shares were off 14.1p at 314.9p, Next dropped 85p to £25.75 and Argos owner Home Retail Group fell 8.65p to 92.25p in the FTSE 250 Index.
The biggest Footsie risers included Sage ahead 6.5p at 293.9p, Weir up 43p at £20.78 and Antofagasta ahead 25p at £12.28.
The biggest fallers included Meggitt down 17.1p at 366.4p, Admiral down 37p at 890.5p and Glencore International off 14.8p at 410.15p.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that risers included Aggreko, up 1.3% at £18.98 and Premier Oil gained 1.7% at 373p. Fallers included SSE which lost 1.6% to £12.57 and Xcite Energy which dropped 6.7% to 83.875p.