Greece bounces back to dent bourses

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London’s leading share index retreated from a six-month high yesterday as hopes of a prompt agreement between Greece and its creditors appeared dashed.

The FTSE 100 Index fell 30.66 points or 0.5 per cent to 5,751.9, with banks among the biggest fallers amid fears that a Greek default would cause massive disruption and instability to the sector.

Chris Beauchamp, market analyst at IG Index, said: “After the kind of rally we’ve had over the past week, some sort of pull-back was almost inevitable. But what we are seeing seems to be more of a general feeling of caution, rather than the beginning of a full-blown retreat.”

Banking shares were also hit after the International Monetary Fund dampened the mood by slashing growth forecasts for the global economy as well as the UK. Lloyds Banking Group dropped 0.9p to 31.7p, Royal Bank of Scotland lost 1.1p to 27.1p, and Barclays was 4.2p lower at 218.5p.

Elsewhere in the finance sector, shares in Hargreaves Lansdown were 3 per cent or 15.3p lower at 431p after RBS cut its rating on the asset manager from “hold” to “sell”.

Scottish oil explorer Cairn Energy saw shares slide 3 per cent or 9.8p to 282.4p after it pulled a £2.5 million shares windfall for its founder Sir Bill Gammell after shareholder pressure.

Safer haven stocks were popular with investors as confidence in the global economic outlook was shaken, causing shares in National Grid to improve 8p to 622p and Severn Trent to add 5p to 1,522p.

In corporate news, Carphone Warehouse shares were 8 per cent higher despite it reporting a 4.7 per cent drop in like-for-like revenues for the quarter to 31 December. Shares were 24.3p higher at 338p.

NEW YORK: Wall Street edged lower last night, ending a five-day rally for the S&P 500, as talks to resolve Greece’s debt crisis hit a snag and earnings from a number of blue chips disappointed investors.

The Dow Jones industrial average was down 33.30 points, or 0.26 per cent, to close at 12,675.52 while the broader Standard & Poor’s 500 Index closed down 1.39 points, or 0.11 per cent, at 1,314.61. The Nasdaq Composite Index finished up 2.47 points, or 0.09 per cent, at 2,786.64.