Italy’s woes weigh on London shares

The London market narrowed its earlier losses yesterday, but remained in the red on signs of further economic woes in the eurozone. By the close, the benchmark FTSE 100 index was down 11.81 points at 6,387.56 having hit an earlier session low of about 6,345.

A European Commission survey showed that confidence had decreased for the first time in six months. Meanwhile, political deadlock in Italy as attempts to form a coalition government took a hit also weighed on sentiment in London. In further economic gloom, official figures confirmed the UK economy shrank by 0.3 per cent in the fourth quarter of 2012, on course for a triple-dip recession.

David Jones, chief market strategist at IG, said: “We have now gone a month since Italy’s inconclusive elections. Amid all the Cypriot hubbub, markets forgot that the eurozone’s third-largest economy was still in the care of an interim government.

“Now however, with Cyprus quiet, markets have woken up to this long-standing worry.”

Vodafone was a big faller, losing some of the premium achieved recently on the back of speculation over a potential £88 billion sale of its 45 per cent stake in Verizon Wireless in the United States. Shares were down 1.8p to 186p.

Shares in May Gurney Integrated Services, which maintains roads, rail and utilities services, surged 35.5 per cent to 250p after construction company Kier Group said it was considering making an offer, setting the stage for a possible bidding war with smaller peer Costain Group.

Kier said it had made previous attempts to discuss a potential combination with May Gurney and had been monitoring the target company’s recent performance.

NEW YORK: The Dow and the S&P 500 ended slightly lower last night after early losses spurred by worries about the possible implications of Cyprus’s bailout for other eurozone lenders.

The Dow Jones industrial average was down 33.41 points, or 0.23 per cent, to close at 14,526.24 while the Standard & Poor’s 500 Index ended down 0.85 points, or 0.05 per cent, at 1,562.92. The Nasdaq Composite Index was up 4.04 points, or 0.12 per cent, at 3,256.52.