Fresh fears about the Spanish economy wiped up to 5% from bank shares and overshadowed a narrow victory for pro-bailout parties in Greece’s election today.
The FTSE 100 Index had been up more than 1% in early trading as the election result seemed to make it more likely Greece would stay in the euro.
It surrendered most of its earlier gains, however, to close up 12.3 points at 5,491.1 as Spain’s implied borrowing costs moved back above the 7% mark at which Portugal, Greece and Ireland needed a bailout.
Royal Bank of Scotland was the biggest faller, down 5%, or 12.3p at 235.3p, Lloyds Banking Group was 1.1p lower at 30.2p, while Barclays was off 4.8p at 196.1p.
In corporate news, Tesco’s shares were higher after it revealed it would pay £40million to exit its Japanese business. Shares were up 2.7p at 303.8p.
Meanwhile, Cable & Wireless set the pace in the FTSE 250 Index after appearing to clinch sufficient support for its takeover by Vodafone. Shares in C&W were 2.7p higher at 37.8p.
The biggest Footsie risers were Ashmore up 9.9p at 340.9p, Burberry ahead 38p at £13.46, Wolseley up 57p at £22.33, and Old Mutual ahead 3.7p at 152.4p.
Among the biggest Footsie fallers were Xstrata down 31.8p at 859.2p and Glencore down 12.1p at 328.4p.
Elaine McLachlan, of investment manager and financial planning specialist Brewin Dolphin in Inverness, noted that the day’s risers included eye care specialist Optos, which gained 5.5% to 177.13p, oil and gas company Melrose Resources was up 4.3% at 111p and Alliance Trust added 1.3% to 345.2p.
Fallers included regional newspaper publisher Johnston Press, off 6.2% at 5p, Anglo Pacific down 5.75% to 258.9p and John Swan, which gave up 5.3% to 312.5p.