Footsie declines as EU fails to release loan payment to spare Greece default

FTSE: 5,693.39 (–21.55) Mid-250: 11,537.84 (–123.94) Small Cap: 3,228.52 (–25.65): UK STOCKS fell yesterday as European governments failed to agree on a payment to spare Greece from default.

Royal Bank of Scotland dropped l 4.4 per cent as the bank sold shares on behalf of its employees.

Charter International tumbled 25 per cent, the most since 2003, after the manufacturer of equipment such as welding gear predicted that 2011 profit will miss company estimates.

The FTSE 100 slumped 0.4 per cent to 5,693.39 at the close in London.

The gauge has declined four consecutive weeks and is 6.5 per cent below this year’s highest close, reached in February, amid concern that Greece may default on its debt.

The FTSE All-Share Index slid 0.5 per cent yesterday.

“Until markets see some solid plans put in place to deal with Greece, the markets are only going to be heading in one direction,” said Simon Furlong, a sales trader at Spreadex in St Albans, England.

Stocks fell as euro area finance ministers put off a decision on whether Greece will get the full €12 billion promised for July as they pushed for budget cuts by prime minister George Papandreou, whose government faces a confidence motion this week.

SuperGroup sank 4.1 per cent to 863p after the retailer said sales growth in the fiscal first quarter was not much better than in the three previous months.

“The SuperGroup trading statement today has not reassured investors as much as we’d have expected, with the bears dwelling on the vibes about a weak May rather a strong June,” Nick Bubb, a London-based analyst at Arden Partners, wrote in a report yesterday, maintaining a “buy” recommendation on the shares.

Inmarsat rallied 4.6 per cent to 590.5p as billionaire Philip Falcone’s LightSquared reached a 15-year deal with Sprint Nextel to share network expansion costs and equipment, and to provide high-speed wireless service to the phone company. The deal will be “materially positive” for Inmarsat, Goldman Sachs analysts wrote yesterday.

International Airlines added to Friday’s gains, which followed an upgrade from broker Davy, rising 2.1 per cent, boosted by falling oil prices.

IMI shed 1.3 per cent, while mid-cap Cookson lost 4.6 per cent. – (Bloomberg/Reuters)