Increased speculation that Spain will be forced to take an EU bailout and fresh worries over China’s growth saw the London market close deep in the red today.
The FTSE 100 Index closed 93.9 points lower at 5,297.3 on doubts that Spain would be able to afford to recapitalise its fourth biggest lender Bankia and fears that other Spanish banks would also need bailing out.
The uncertainty hit banking stocks as Lloyds Banking Group dropped 2% or 0.6p to 25.3p, Royal Bank of Scotland fell 0.6p to 20p and Barclays shed 1.6p to 179.5p.
Miners dominated the fallers board as Tuesday’s hopes of additional moves to invigorate the Chinese economy were given short-shrift in Beijing.
Eurasian Natural Resources was the biggest faller, losing 7% or 30.6p to 434.6p, while Vedanta Resources was off 53.5p at 940.5p and Rio Tinto dropped 121p at £28.01.
Other stocks on the way down included Marks & Spencer, as new shareholders lost the right to the forthcoming dividend payment. It declined 12.8p to 332.2p.
Severn Trent was slightly higher despite the utility firm revealing a near 5% fall in underlying pre-tax profits to £275.3million in the year to March 31. Shares were 42p higher at £17.06.
Outside the top flight, wholesaler Booker was at the top of the FTSE 250 Index after it announced a cash and shares deal worth £139.7million to buy UK rival Makro. Shares were 7.9p ahead at 87p.
The biggest Footsie risers included Morrisons ahead 1.7p at 275p, Next up 11p at £30.13 and ARM Holdings ahead 1p at 508.5p.
Among the biggest Footsie fallers were Capital Shopping Centres down 10p at 620p and BG Group off 59.5p at £12.24.
Stuart Lamont, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted Parkmead Group closed up 0.9% to 13.6p and Stagecoach Group gained 0.4% to 235p.
Among the fallers, AMEC dropped 3.9% to 975p while Aberdeen Asset Management gave up 3.6% to close at 237.5p.