DCSIMG

MONDAY MARKET CLOSE: Footsie fails to hold on to early gains

  • by DOMINIC JEFF
 

Energy firm SSE continued to be punished for last week’s decision to freeze prices as the FTSE 100 failed to hold on to early gains.

Perth-based SSE was the biggest faller in the top flight, down 42p or almost 3 per cent, at 1,469p.

The FTSE 100 Index closed 17.21 points lower at 6,598.37, after spending most of the session in the black. The fall came despite a drop in inflation in the eurozone, increasing the likelihood of some sort of monetary easing on the Continent.

Sam Fox, an analyst at Spreadex, said: “The lower-than-expected inflation data puts further pressure on the European Central Bank (ECB) to act sooner, something we may see on Thursday when the ECB press conference is set to take place.”

Some insurers saw a partial paring back of the declines suffered after the Financial Conduct Authority confirmed plans for an inquiry into 30 million financial policies sold between the 1970s and 2000.

Analysts at Societe Generale said the market seemed to have over-reacted on Friday. In a note on Aviva, they pointed out that the FCA had indicated that the review would not seek to remove exit charges on the “legacy” insurance products covered by the probe.

The improved sentiment helped Aviva climb more than 1 per cent, or 6.8p, to 477p, while Friends Life insurer Resolution – which had plunged 7 per cent in the previous session – was up 2.5p to 298.8p.

But elsewhere in the sector, Legal & General, which lost more than 3 per cent on Friday, edged a further 0.3p lower to 204.7p, while Prudential dipped 12p to 1,268.5p.

Engineer Babcock was the biggest blue chip riser after it was chosen by the UK government to decommission a dozen nuclear sites. Its shares added more than 4 per cent at 1,347p.

 

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