Disappointing US growth figures and fears over the future of the eurozone saw London’s leading shares index fall 1% for the second day in a row.
The FTSE 100 Index fell 67 points to 5,742 today amid speculation that the eurozone’s emergency bailout fund could be boosted beyond its current ceiling of £418billion.
The shaky sentiment hit the banking sector, with Barclays the biggest faller, down 5% or 11.5p at 234.2p and Royal Bank of Scotland off 0.8p at 27.8p.
Lloyds Banking Group fell 1p to 33.4p after the boss of Co-operative Group said there were “material and regulatory” questions over its bid for 632 of the lender’s branches.
Clothing retailer Marks and Spencer (M&S) was one of the biggest losers of the day.
It shed nearly 3% after Swedish fashion giant H&M warned that increased costs – mainly higher cotton prices – had hit its gross margins.
M&S dropped 11p to 373.2p, while fashion chain Next slipped 29p to 2980p.
The Footsie’s biggest risers were International Power up 21.6p at £4.05, Rio Tinto ahead 59.5p at 3375.5p, Imperial Tobacco up 37p at £25.57 and Aberdeen Asset Management ahead 1.3p at 258.1p.
Among the bigger fallers were Aviva off 11.5p at 325.1p, Weir Group down 55p at £16.98 and CRH off 40p at £12.50.
TUI Travel was among the fallers on the FTSE 250 Index despite revealing improved summer sales since its last update in February. Shares were down 5.2p at 192.2p.
Elaine McLachlan, of investment manager and financial planning specialist Brewin Dolphin in Inverness, highlighted eyecare specialist Optos gaining 8.3% to 237.1p, oil and gas service company Plexus Holdings up 3% at £1.21 and broadcaster STV Group rising 1.9% to 117.3p.
Five-a-side football venue operator Goals Soccer Centres was off 4% at £1.10 and regional newspaper publisher Johnston Press was 3.9% lower at 6.3p.