Markets: FTSE’s positive quarter ends in gloom

The London market ended an otherwise positive quarter on a muted note yesterday as concerns over Spain weighed on shares.

With rumours that the Spanish government would seek a formal bail-out circling, the FTSE 100 Index reversed early gains to close some 37.4 points lower at 5,742.1. It was still up by more than 3 per cent over the last three months.

Michael Hewsonat CMC Markets said: “European markets have gradually lost their early momentum slipping back into negative territory as investors reposition their portfolios heading into the end of the week, the month and the quarter.”

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Traders were kept on tenterhooks by the results of stress tests on Spanish banks which would determine the size of the rescue deal needed to re-capitalise them, but in the event the figure came in at a lower-than-expected €59.3 billion (£47bn) shortly after markets closed.

Shares in Barclays, considered to have the largest exposure to Spain among the UK banks, were down 2.4p to 214.85p. Royal Bank of Scotland was 0.4p higher at 257p, despite it setting a flotation price for insurance arm Direct Line a little below expectations.

Insurers were lower after the Office of Fair Trading referred the private motor insurance market to the Competition Commission for a probe that could drag on for up to two years. More Than-parent RSA was 1.5p lower at 110.5p, while Admiral was off 32p at 1,053p.

NEW YORK: Wall Street closed its best third quarter since 2010 after a wave of central bank actions sparked a dramatic reversal in equity markets, but signs of weakness in the economy last night pushed stocks lower.

The Dow Jones industrial average dropped 48.84 points, or 0.36 per cent, to end at 13,437.13 while the Standard & Poor’s 500 Index dropped 6.48 points, or 0.45 per cent, to finish at 1,440.67.