BSkyB and financial equities main fallers as Footsie loses ground

FTSE:5,929.16 (–61.42) Mid-250:11,880.06 (–194.20) Small Cap:3,302.55 (–22.02)

UK STOCKS fell for a second day yesterday, as concern mounted that the euro area’s sovereign-debt crisis will spread to Italy.

Barclays, Lloyds Banking and Royal Bank of Scotland led the FTSE 100 lower.

The FTSE 100 fell 1 per cent to 5,929.16 at the close in London. The gauge dropped the most in two weeks as a US jobs report showed that the world’s largest economy added fewer jobs in June than economists had predicted.

The FTSE All-Share Index declined 1.1 per cent yesterday.

“Contagion risk towards the third-biggest economy in Europe is definitely on people’s radars now, undoubtedly, and that’s probably what’s changed over the last three days,” said Graham Bishop, European equity strategist at RBS.

Yields on Italy’s benchmark 10-year bonds increased for a sixth day, jumping 41 basis points to 5.685 per cent in London.

Greece, Ireland and Portugal all had to ask for international assistance from the European Union after their 10-year yields rose above 7 per cent.

BSkyB slumped 4.6 per cent to 715.5p, extending last week’s 12 per cent retreat, as the shares neared News Corporation’s 700p a share offer for the UK’s biggest listed broadcaster.

Trinity Mirror retreated 8 per cent to 46p after last week rallying 18 per cent on speculation that the publisher of the Sunday Mirror would gain advertising revenue from News Corporation’s News of the World Sunday tabloid.

News Corporation published the final edition of the newspaper on July 10th.

Barclays sank 3.8 per cent to 234p. Lloyds declined 3.7 per cent to 44.8p.

RBS slipped 4 per cent to 35.7p.

International Power, the UK utility controlled by GDF Suez with a 69.8 per cent stake, jumped 2.6 per cent to 309.1p after saying that a new carbon tax in Australia would not have a material impact on the company’s results.

Northumbrian Water gained 5 per cent to 447.7p after Cheung Kong Infrastructure made a non-binding 465p per share offer.

Laird, the biggest maker of mobile-phone electronic shields, tumbled 6.9 per cent to 190p.

Yell, the publisher of the Yellow Pages telephone directory in the UK, surged 9.2 per cent to 9.5p after announcing that it agreed to purchase Znode, a privately owned e-commerce software provider. – (Bloomberg/Reuters)