Fightback held in check by eurozone

LONDON FTSE 100 CLOSE 5,858.41 +22.52

The FTSE 100 index staged a modest recovery yesterday despite a share slide at Marks & Spencer and ongoing concerns over the eurozone debt crisis.

Following Monday's major sell-off, the Footsie rose 22.52 points to 5,858.41.

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Michael Hewson, market analyst at CMC Markets, said shares rebounded as investors cautiously re-entered the market, led higher by rising commodity prices and mining stocks.

But Will Hedden, sales trader at IG Index, said the bounce-back was capped by eurozone debt worries.

"The European debt crisis is still very much the topic de jour," he said.

The pound was down against the euro at €1.15 after the single currency benefited from stronger economic data from Germany, but was up against the dollar at $1.62.

Miners and oil firms were among the biggest risers after benefiting from rising oil and metal prices.

Cairn Energy was among the top risers, up 16.6p or 4 per cent to 435.8p after saying it plans to spend about $600m (371.4m) drilling near Greenland this summer.

However, yesterday saw another difficult session for UK banks after Moody's said 14 of the 18 banks and building societies it covers were in danger of ratings downgrades due to the withdrawal of emergency support for the industry. Lloyds Banking Group fell 1.1p to 49.7p and Royal Bank of Scotland dropped 0.4p to 40.4p.

Barclays and HSBC were down 2.7p to 265.6p and 3.2p to 623.5p respectively, even though they were excluded from the Moody's list.

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M&S was the top flight's biggest faller, despite posting a 13 per cent rise in annual profits as analysts fretted that its results could be "as good as it gets".

The retailer, which has enjoyed a strong run in recent weeks, fell 11.4p to 385.6p, as investors looked beyond the rise in full-year profits to 714.3 million and noted the company's cautious comments on trading this year.

The update from M&S did little to ease nerves about the state of the British high street.

Other retailers on the back foot included Primark owner Associated British Foods, which fell 11p to 1,067p, while supermarket group Tesco dropped 1.6p to 413.3p.

The session was also notable for the full market debut of commodities trader Glencore, which become the first company in 25 years to be fast-tracked into the FTSE 100.

Glencore shares are still lower than their starting price of 530p after dropping to a low of 506p during conditional trading last week, but recovered to 525p yesterday.

Its place in the top flight is at the expense of engineering firm Invensys, demoted to the FTSE 250. It fell 2.1p to 293.1p.

Scottish confectioner Lees Foods saw shares gain more than 10 per cent after it revealed it had broken through the 1m profit barrier for the first time in its history.Shares were up 19p to 197.5p.

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Aim-quoted Omega Diagnostics gained more than 7 per cent on news that a deal with a subsidiary of Toyota would help it break into the US market. Shares in Clackmannanshire-based Omega added 1p to 14.5p.