Return of Greek drama shakes City

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The FTSE gave up early gains yesterday as reminders that the Greek debt crisis is still smouldering away put paid to any risk appetite among traders.

The struggling country came back on to the financial radar as it closed its state TV station in order to save money, while equity index compiler MSCI re-clasified it as an emerging economy.

Ishaq Siddiqi, market strategist at ETX Capital, said: “Speculation that the Greek government have called an emergency cabinet meeting and PM Samaras may have to stand a vote of confidence again has sparked a sell-off in European markets.”

The FTSE 100 index slumped 40.63 points or 0.6 per cent to 6,299.45. Severn Trent was the biggest faller, down 8.9 per cent as traders got a chance to react to news its wealthy suitors had walked away. The shares lost 172p at 1,765p.

Vodafone also took a few points off the Footsie as it went ex-dividend on the same day that it unveiled its own interest in buying German operator Kabel Deutschland. Its shares were down 11p or 5.7 per cent at 181p.

Aberdeen Asset Management was one of the better performers as investors hoovered up shares from five month lows following five successive days of losses. A “buy” note from broker Canaccord Genuity helped the stock add 6.7p at 402.5p.

Aim-quoted Scotgold Resources, which is aiming to create Scotland’s first commercial gold mine, revealed that former chairman Shane Sadleir had sold more than five million shares in the firm over recent weeks, but retains almost ten million shares, equivalent to a stake of about 4.7 per cent. Sadleir served as chairman from 2007 to 2008 and resigned as a non-executive director in April. The shares were 8 per cent higher at 1.33p.

NEW YORK: US share slid last night, ending a volatile day with the Dow down more than 100 points in a sell-off driven by concerns about central banks winding down their stimulus measures.

The Dow Jones industrial average dropped 126.79 points, or 0.84 per cent, to end at 14,995.23 while the broader Standard & Poor’s 500 Index fell 13.61 points, or 0.84 per cent, to finish at 1,612.52. The Nasdaq Composite Index slipped 36.52 points, or 1.06 per cent, to close at 3,400.43.