Bank results fears weigh on the FTSE

FTSE 100 CLOSE 5916.55 -11.65

Royal Bank of Scotland led the financial sector lower yesterday as traders took a cautious view ahead of today’s results.

The part-nationalised bank was down 3.1 per cent at 27.33p as it prepared to unveil hefty bottom-line losses. That was despite Espirito Santo upping its “fair value” price for the stock to 27p.

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Barclays also fell, down 3.5 per cent at 239.2p, albeit as the stock went ex-dividend.

Carnival and Reckitt Benckiser also traded without their payment attractions, down about 2 per cent each at 1,903p and 3,500p respectively.

The FTSE 100 closed down 11.65 points or 0.2 per cent at 5,916.55 as weak economic data from the eurozone added to scepticism over the recent Greek bail-out. Mike McCudden, head of derivatives at Interactive Investor, said that with the Greek debt crisis now shifting to the background, oil was coming to the forefront of traders attention once again.

“Signs of a global recovery mixed with supply issues and increasing tensions with Iran is all the ammunition speculators need to talk oil up as high as $150 a barrel,” he said.

Royal Dutch Shell was up 0.2 per cent to 2,309p after it launched a near-£1 billion offer for Mozambique-focused small cap oil explorer Cove Energy. Cove’s shares jumped 25 per cent to 194p, just shy of the offer price.

And shares in Edinburgh oil and gas explorer Bowleven added 4.5 per cent at 123p amid heavy trading in light of interest in the company from Dubai-based Dragon Oil.

Alan Bonner, the chief executive of Stirlingshire-based Pinnacle Telecom, upped his stake in the firm to 9.6 per cent with a £14,000 share purchase, but it closed 5 per cent lower at 0.37p.

New York: Banks led U.S. markets lower last night as the Standard & Poor’s 500 Index stalled near a ten-month-high after signs of weak European business activity rekindled concerns about a recession overseas.

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The Dow Jones industrial average ended the day down 26.72 points, or 0.21 per cent, at 12,938.97 while the S&P 500 closed down 4.57 points, or 0.34 per cent, at 1,357.64. The Nasdaq Composite Index ended down 15.40 points, or 0.52 per cent, at 2,933.17.

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