Financial stocks took a tumble as the suspension of shares in Portugal’s Espirito Santo led to renewed fears over the eurozone’s banking sector.
Share trading in the bank was halted after a precipitous fall of more than 16 per cent, dragging the Lisbon stock exchange down and affecting the European nation’s borrowing rates.
Jasper Lawler, market analyst at CMC, said: “With tougher capital requirements, it means banks need to keep more money in reserve and can’t lend it out and make returns. This problem is exacerbated in Europe where weak economies are not generating demand for banks loans in the first place.”
Barclays was down 3.5p at 208p, HSBC slid 7.5p to 589p and RBS was 1.3p lower at 314.9p. Fund managers Hargreaves Lansdown and Ashtead were hit harder, and were the two biggest fallers in London’s top flight. Hargreaves dropped more than 4 per cent to 1,128p, while Ashtead was 3.9 per cent lower at 878.5p. London Stock Exchange’s own shares dipped more than 3 per cent at 1,896p.
The renewed eurozone worries weighed on equities in general and pushed the FTSE 100 to its lowest point since April, with the top flight 45.67 points lower at 6,672.37.
Burberry was the top stock on a shortened top flight risers’ board after it said retail revenues for its first quarter were up 17 per cent to £370 million, including a 12 per cent rise from existing stores.
Despite warning that the strength of the pound could have a deepening impact on its bottom line, shares rose 3 per cent or 45p to 1,464p.
The risers’ board also featured supermarket group Tesco after it raided Marks & Spencer to hire Alan Stewart as its new finance director. Shares lifted 1.2p to 280.7p, although M&S was also higher, up 5p at 423p.