Markets: Ringfence and eurozone hit Footsie

A RAFT of factors – including political turmoil in the eurozone and George Osborne’s “electric ringfence” for the banks – conspired to push the FTSE 100 index into its biggest single-day points fall since July.

The Footsie dropped 100.4 points to end the day at 6,246.84 as investors also took profits following the index’s best January performance since 1989.

Alastair McCaig, a market analyst at IG, said: “Fears over the UK government’s handling of the segregation of banks’ retail and investment arms have spooked the markets and – coupled with Spanish government corruption rumours – pushed the FTSE lower.”

Spain’s prime minister, Mariano Rajoy, faced calls to quit, while news that Silvio Berlusconi’s right wing coalition could be a contender in the Italian elections stoked fears of political deadlock.

Osborne’s warning that UK lenders will be broken up if they flout rules over ring-fencing took its toll on banking stocks.

Royal Bank of Scotland was 11.9p lower at 328.6p, while HSBC was down 13.5p at 706.1p and Lloyds dipped 1p to 50.7p.

Barclays was 8.5p lower at 291.5p after it said finance director Chris Lucas will quit.

Mining stocks were among those hit by profit taking, resulting in a fall of 32p to 1,127p for copper specialist Antofagasta, while Eurasian Natural Resources was down 9p to 329.3p, a drop of 3 per cent.

Mobile phone network operator Vodafone fell by 3p to 170.5p following a downgrade from analysts at Citigroup.

North Sea oil driller EnQuest headed in the opposite direction – up 1p at 131.7p – after being given a tax break to develop its £169 million Thistle field and announcing its retail bond will be worth £100m.

NEW YORK: Wall Street slid last night, giving the S&P 500 its worst day of the year, as renewed worries about the eurozone crisis caused the market to pull back from recent gains.

The Dow Jones industrial average closed down 129.17 points, or 0.92 per cent, at 13,880.62 while the broader Standard & Poor’s 500 Index dropped 17.43 points, or 1.15 per cent, to end at 1,495.74.

The Nasdaq Composite Index fell 47.93 points, or 1.51 per cent, finishing the day on 3,131.17.