FTSE falls on euro debt fears, unclear poll result

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index sunk to a three-month closing low on Friday on investor concerns over Greek debt contagion as well as the lack of an outright winner in the British election.

The FTSE 100 closed down 137.97 points, or 2.6 percent, at 5,123.02, wiping about 30 billion pounds off the market.

The index hit its lowest closing level since February 9 in its fifth straight session of decline. This week marked the worst performance from the blue chips since early March 2009.

“It’s certainly noisy — it’s very volatile. There seems to be quite a bit of panic selling coming in,” said Manoj Ladwa, senior trader at ETX Capital, describing the atmosphere on the trading floor.

“We had the issues with the U.S. yesterday (on) concerns in Greece spreading to the rest of the euro zone, and the election today. It looked like a hung parliament was priced in. Apparently not, and the market’s selling off rapidly on the back of it,” he said.

Integrated oil stocks took the most points off the FTSE 100, pressured by a fall in the price of crude as the dollar firmed on investors’ flight to quality. BG Group, BP and Royal Dutch Shell shed 1.9 to 3.1 percent.

UK-focused banks were also sharp fallers. Royal Bank of Scotland, Barclays and Lloyds Banking Group dropped 5.5 to 6 percent. Emerging market-focused Standard Chartered fared better, shedding 2.5 percent.

But HSBC managed a 0.2 percent rise after an upbeat first-quarter trading update.

Britain’s opposition Conservatives said they would try to form a government with the smaller Liberal Democrats after winning the most seats in the closest parliamentary election in a generation.

UK outsourcing firm Capita shed 5.6 percent on concerns over the impact a stalemate might have on future contracts, with Shore Capital downgrading its rating. Peer Serco fell 4.2 percent.

On the other side of the Atlantic, U.S. stocks (Read more about the stock market today. ) fell as worry persisted about a financial meltdown stemming from the European debt crisis and after a dramatic intra-day drop in indexes in the previous session.

U.S. stocks (Read more about the stock market today. ) shrugged off a report showing the U.S. economy added jobs in April at the fastest pace in four years, and a measure of investor fear jumped almost 30 percent.


Aside from HSBC, miners were the only blue-chip risers, as some bullish punters went in search of bargains from a sector

which has shed almost 14 percent in the last two weeks.

Xstrata, Randgold Resources and Rio Tinto rose 0.7 to 1.5 percent.

“The speed of political horse trading between the three main UK parties will now have to be upped to prevent markets continuing their meltdown,” said Anthony Grech, head of research at IG Index.

“Investors may breathe a sigh of relief when the FTSE closes for the weekend, with many traders no doubt now aiming to call the bottom of the market and hoping that an acceptable political solution may be found over the weekend.”

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(Editing by Karen Foster)

FTSE falls on euro debt fears, unclear poll result