Europe debt concerns hit FTSE 100

Europe debt concerns hit FTSE 100

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The FTSE Index closed down 23 points at 5,528.3

The FTSE 100 closed down again on Tuesday as fresh concerns about the euro debt crisis wiped out earlier gains.

The London market, which tumbled 2% on Monday amid worries over the potential for further bail-outs, had stood 10 points higher at lunchtime, but it slipped back into the red in later trading and finished down 23 points at 5,528.3.

Banking stocks were hit as investors continued to worry about the financial stability of Ireland, Spain and Portugal, with Barclays, which has high exposure to Spain, seeing its shares sink 6.8p to 256.15p.

The FTSE 250 was even worse hit, dropping 81.9 to 10,607.7, while Germany’s DAX and the CAC-40 in France both also lost earlier gains to finish down 0.1% and 0.8% respectively.

The euro lost ground against the pound, dropping by 0.7% to leave a pound worth 1.19 euro.

Concerns about eurozone debt were offset by the prospect of positive US data to be released later in the session, including figures on consumer confidence and manufacturing.

Rising commodity prices helped mining stocks recover from some of yesterday’s losses, with Rio Tinto up 37p at 4079p, BHP Billiton ahead 19.5p at 2285p and Lonmin gaining 10p to 1693p.

Energy stocks also benefited from stronger commodities, with Essar Energy topping the risers board, up 20.5p at 522p, and Cairn Energy up 8.9p at 386.5p.

But banks continued to suffer in the wake of the Irish crisis, with Lloyds Banking Group down 0.1p at 60.4p and Royal Bank of Scotland down 0.9p to 37.6p.

In corporate news, shares in school trips and hotel breaks firm Holidaybreak jumped 7% after it posted a 9% rise in full-year profits and announced the acquisition of 50% of student accommodation firm Meininger.

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