Traders bemoan eurozone crisis rerun

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ITALY’S inconclusive election result took its toll on the Footsie for a second day as investors sold stakes in banking and mining stocks amid fears that the 
eurozone debt crisis will 

The FTSE 100 index ended the day down 84.93 points, or 1.3 per cent, at 6,270.44, its lowest close for a fortnight.

Mining stocks, which are sensitive to global economic demand, shaved 23 points off the index, while the banks – which hold European sovereign debt and corporate bonds – accounted for 15 of the lost points.

Barclays fell 14.7p at 297p, Royal Bank of Scotland was off 15.3p at 339.5p and Lloyds Banking Group fell 1.8p to 53.1p.

Chris Beauchamp, market analyst at IG, said: “It was dormant for quite a while, but the eurozone crisis is back with us. How we’ve missed it.”

Italy’s MIB plunged nearly 5 per cent and markets in France and Germany fell by more than 2 per cent as the deadlock is expected to make it harder for Italy to pass the reforms it needs to reduce its debts.

Sterling, which received a battering after the loss of Britain’s triple-A credit rating, fell further yesterday despite euro weakness after Bank of England deputy governor Paul Tucker said he was open to more monetary easing and that the pound may need to fall further.

Engineer GKN climbed 9p or 3.6 per cent to 261.3p after its 19 per cent rise in full-year profits beat City expectations, despite warning of a cautious outlook for its car parts business.

Aim-quoted cosmetics firm Swallowfield – in which Swedish financier Peter Gyllenhammar holds a near 30 per cent stake – dipped 1p to 103p after chief executive Ian Mackinnon agreed to leave the firm after discussions with major investors.

NEW YORK: Wall Street closed higher last night, rebounding from the worst decline since November, after Federal Reserve chairman Ben Bernanke defended the Fed’s bond-buying stimulus and sales of new homes rose.

The Dow Jones industrial average shot up 115.96 points, or 0.84 per cent, to end at 13,900.13 while the Standard & Poor’s 500 Index gained 9.10 points, or 0.61 per cent, to finish at 1,496.94. The Nasdaq Composite Index advanced 13.40 points, or 0.43 per cent, to close at 3,129.65.