Markets: FTSE is battered from all directions

A FLURRY of bad news from Europe and fresh worries over China’s growth saw the London market lose 1.7 per cent yesterday.

Angus Campbell, head of market analysis at Capital Spreads, said: “The market was hit from all angles as the latest poll from Greece gave the anti-bailout party the biggest share of the vote, the Italian bond auction was a disappointment and EU economic and industrial confidence data fell sharply in May, much more than expected.”

The FTSE 100 Index closed some 93.9 points lower at 5,297.3, as European markets tanked on doubts that Spain will be able to afford to recapitalise its fourth biggest lender Bankia.

Miners dominated the Footsie fallers’ board as hopes of additional moves to invigorate the Chinese economy were given short-shrift in Beijing. Eurasian Natural Resources was the biggest faller, losing 7 per cent or 30.6p to 434.6p, while Vedanta Resources was off 53.5p at 940.5p and Rio Tinto dropped 121p at 2,801p.

The uncertainty in Spain hit British banking stocks as Lloyds dropped 2 per cent or 0.6p to 25.3p, Royal Bank of Scotland fell 0.6p to 20p and Barclays shed 1.6p to 179.5p.

Other stocks on the way down included Marks & Spencer as the retailer went ex-dividend. The decline of 12.8p to 332.2p came despite ING removing its “sell” rating on the stock amid hopes events such as the Diamond Jubilee will boost sales.

Outside the top flight, wholesaler Booker topped the FTSE 250 Index after it announced a cash and shares deal worth £139.7 million to buy rival Makro. Booker mainly supplies caterers and local shops and the acquisition will help it target small and medium sized businesses. Shares were 7.9p up at 87p.

New York: Wall Street saw shares plunge last night as surging bond yields in Spain and Italy ratcheted up tensions in financial markets about Europe’s ability to solve its spiraling debt crisis.

The Dow Jones industrial average dropped 161.13 points, or 1.28 per cent, to close at 12,419.56 while the broader S&P 500 Index fell 19.15 points, or 1.44 per cent, to 1,313.27 by the close. The Nasdaq Composite lost 33.63 points, or 1.17 per cent, to end the day on 2,837.36.