Greece slide a cause for anxiety

THERE was a nervous start to the week on the FTSE 100 index yesterday as worries over Greece's ability to repay its debts led to a jittery session.

Anxiety over India's surprise move to raise interest rates also fuelled concerns over sinking growth, once governments start winding down their economic stimulus measures.

The Footsie was down more than 60 points at one stage, although it later clawed back most of the losses to finish just 5.6 points down at 5,644.5 as US stocks gave a late-session lift to the top flight.

The Dow Jones Industrial Average added 0.4 per cent in early trading, led higher by healthcare firms after the US House of Representatives passed president Barack Obama's controversial health reform bill.

Michael Hewson, an analyst at CMC Markets, said: "London's blue chips are still slightly down on the 21-month high seen last week after sellers dominated the morning session.

"They have regained some ground as Wall Street pulled back on some of Friday's losses."

The pound see-sawed for much of the day against the dollar but eventually edged towards $1.51 as investors moved out of the safe-haven currency into other assets.

Sterling moved up to 1.11 against the euro as markets await the outcome of an European summit on Thursday, which will hopefully put an end to the Greek debt crisis.

Defensive stocks were in vogue for investors in a choppy session with drugs giants GlaxoSmithKline and AstraZeneca up 7.5p to 1,294p and 28p to 2,970p respectively. Tobacco companies also made gains, led by Imperial Tobacco, up 19p to 2,050p.

Investment bank Investec enjoyed a healthy debut in the top flight – adding 13p to 552p – but plumbing and heating giant Wolseley saw poorer fortunes.

The firm was one of the market's biggest fallers as it revealed that interim trading profits slumped 34 per cent. Wolseley lost 2 per cent, or 34p, to end the day at 1,586p.

It also unveiled the results of a group-wide review that will see 19 businesses sold if their performance is not improved – including its UK Build Center builders' merchant chain.

Icap was another to report back after a strategy review. The group – down 10.1p at 381.4p – said it would drop its struggling full-service agency cash-equities business in Europe and Asia after poor performance. The move will impact on 114 jobs.

The inter-dealer broker also lowered profits expectations, guiding for full-year profits in the range 295 million to 315m, down from the 311m to 347m forecast given in November.

Office space firm Regus was the biggest second-tier riser after it raised its dividend and said it would step up expansion plans despite a 42 per cent fall in pre-tax profits. Shares jumped 15 per cent, or 13.3p, to 100.5p.

Among the Scottish stocks, Cumbernauld-based AG Barr was a strong riser in the FTSE 250 after the maker of Irn-Bru said full-year profits were up 20.8 per cent to 27.9m. Barr rose 1 per cent, or 9.5p, to 910p.

Forth Ports reported a return to the black in 2009, with pre-tax profits of 36.3m against losses of 30.7m in 2008. Shares in the Edinburgh-based company – which will meet this week with major shareholders that are mounting a takeover bid – ended the day up 7p at 1,397p.

Shares in Wood Group closed down 2.3 per cent, or 8.7p, at 373.2p. The fall came as chairman Sir Ian Wood transferred 333,000 of his shares to the Wood Family Trust, at no cost. The transfer reduced Wood's direct stake in the group to 5.3 per cent, while his non-beneficial interest increased to 11.9 per cent.