FTSE close: BHP, Rio, M&S lower

By THIS IS MONEY
Updated:

 

17.30 (close)

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The FTSE 100 Index relapsed into the red today as it gave back Tuesday's gains on persistent fears over the Greek debt crisis.

Early increases for airline and travel stocks after Britain's airspace reopened following the volcanic ash cloud proved short-lived as the Footsie closed 60.3 points lower at 5723.4.

Indices across Europe also fell on the Greek concerns, with the Cac 40 in France down 0.9% and Germany's Dax off 0.5%.

The debt-laden Greek government began detailed talks over a financial bailout as its borrowing costs reached a record high and the International Monetary Fund said the woes could cast a cloud over European recovery.

Nick Serff, market analyst at City Index, said: 'The market is clearly still feeling a bit jittery about the Greece debt situation, particularly with Greece talking to the EU and IMF today regarding the economic plan.

'We have seen further selling of the euro, with Greek bond yields continuing to blow-out emphasising the nervousness that remains regarding the eurozone outlook.'

As the Greek debt issue hung over the European currency, the pound rose to 1.15 against the euro and 1.53 against the dollar.

On the FTSE 100, pressure in the mining sector came after traders continued to fret about demand prospects and heavyweight firm BHP Billiton disappointed analysts with its latest production figures.

BHP fell 62p to 2118p, while many players also lost ground after turning ex-dividend, including Xstrata, off 52p to 1165p.

Retailers weighed on the index after Marks & Spencer shares were downgraded by Bank of America and investors worried that yesterday's surprisingly large hike in inflation - to 3.4% in March - raised the risk of a move up in interest rates, which could hit consumers' pockets. M&S shares were down 11.5p to 376.1p.

Elsewhere in the sector, shares in FTSE 250 Index listed Game Group slumped 12% after it posted a 27% fall in full-year profits and announced the departure of chief executive Lisa Morgan.

With trading conditions remaining tough, Game shares fell 12.1p to 89.3p and dragged rival HMV down by 4.4p to 80.6p.

Other ex-divi stocks meanwhile added to the pressure on London's Footsie, led by defence firm BAE Systems, which fell 18.6p to 358.8p.

Travel-related shares struggled to make headway despite the resumption of flying. BA lost an earlier gain to stand 0.4p lower at 233.5p, while easyJet added 4.5p to 484p. Thomson holidays parent TUI Travel was off 0.3p to 288.9p.

The biggest rise in the FTSE 100 Index came from chip designer ARM Holdings after strong results from technology giant Apple.

Cambridge-based ARM, whose chip designs are used in a raft of digital products such as mobile phone handsets and MP3 players, rose more than 3% - up 7.5p to 250.5p - after Apple shattered Wall Street hopes with second-quarter figures.

The biggest Footsie risers were Arm Holdings up 7.5p at 250.5p, Royal Bank of Scotland ahead 1.4p at 54.1p, Hammerson up 8.9p at 390.5p and Tesco up 7.1p at 438.1p.

The biggest Footsie fallers were BAE Systems down 18.6p at 358.8p, Xstrata off 52p to 1165p, Prudential down 23p at 564.5p and Petrofac down 40p at 1193p.

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