Markets: Spanish fears return to haunt Footsie

Chris Beauchamp, market analyst at IG Index, said a statement from Spain’s central bank saying the country was in recession fed concerns that Madrid may yet be unable to sustain its austerity measures.

“It certainly seems that the eurozone’s potential problems are the main drivers of fear, with American indices remaining closer to recent highs,” he said.

Royal Bank of Scotland shares were boosted by reports the UK government could sell some of its stake in the company. The taxpayer-backed bank was the top flight’s biggest riser after reports said the government has been negotiating with Abu Dhabi sovereign wealth funds for months, although ministers denied a sale was imminent. Shares rose 3.3 per cent, or 0.9p, to 28.7p.

The heavily weighted mining sector was boosted by strong results from copper giant Kazakhmys, which unveiled higher pre-tax profits of £1 billion for last year and hiked its dividend by 27 per cent. Its shares rose 2 per cent or 19.5p to 944.5p while Xstrata lifted 10.5p to 1,106p.

Friends Life-owner Resolution was among the biggest fallers after the acquisition vehicle said it may divest huge chunks of its insurance assets through two separate listings in 2014.

The company saw shares drop 6.7p to 268.2p after it also unveiled a net loss of £62 million in 2011.

Aberdeen-based oil firm Faroe Petroleum saw its hares lift nearly 6 per cent, to 163p, after it revealed that last year’s asset swap with a Norwegian company had lifted it into the black.

New York: Wall Street closed near session lows after a more than 1 per cent rally lifted the S&P 500 to a four-year high Monday, with a number of large-cap stocks at new 52-week highs as portfolio managers grabbed top performers near quarter-end.

The Dow Jones industrial average ended down 43.90 points, or 0.33 per cent, at 13,197.73 while the S&P 500 Index lost 3.99 points, or 0.28 per cent, to close at 1,412.52. The Nasdaq Composite closed down 2.22 points, or 0.07 per cent, at 3,120.35.