FTSE: 5,436.70 (-29.66) Mid-250: 10,250.39 (-88.12) Small Cap: 2,832.73 (+8.41):BRITAIN'S LEADING share index closed lower yesterday, giving up early gains, as miners and banks went in to reverse after hopes for an imminent solution to Europe's debt crisis were dashed by comments from Germany's finance minister.
Wolfgang Schaeüble played down heightened expectations that European governments will resolve the regions sovereign debt crisis at a European Union summit on October 23rd.
Finance ministers and central bankers of the Group of 20 major economies had said at the weekend they expected the EU summit to “decisively address the current challenges through a comprehensive plan”.
Specialty miners and banks bore the brunt of the sell-off as investor appetite for such risk-sensitive stocks swung from sharply positive to negative.
Again, promises of decisive measures to come, but thats been heard many times before and, until there are concrete proposals, investors are right to remain relatively sceptical, said Henk Potts, market strategist at Barclays Wealth.
The FTSE 100 index closed down 29.66 points, or 0.5 per cent, at 5,436.70, having dropped from an intraday peak of 5,543.72, back below technically important levels around 5,450 which it breached for the first time in 10 weeks on Friday.
Oils topped the blue-chip sector performers mainly thanks to strong gains in BP, which added 2.2 per cent after it and Anadarko , its partner in the well that caused last years Gulf of Mexico oil spill, agreed a $4 billion settlement on clean-up costs.
Oil services firm AMEC also stood out, gaining 1.7 per cent, after unveiling a 150-million pound ($237 million) engineering and project management contract win as part of an existing tie-up with BP.
G4S plunged 22 per cent after agreeing to buy Danish outsourcing service provider ISS in a £5.2 billion deal including debt, creating the worlds biggest security and facilities services group.
The deal could carry risks as a large transaction, in that it could dilute G4S focus on pure security, especially in government security and emerging markets security, and ISS may be unappealing to investors who turned down the IPO this year, JPMorgan Cazenove said in a research note. – (Reuters)
