THURSDAY MARKET CLOSE: FTSE falters as Centrica loses spark

Much of the Citys attention was on Scottish Gas owner Centrica. Picture: John Devlin

The Greek government offered to extend its rescue loan agreement by six months but Germany said the move “is not a substantial proposal for a solution”.

The benchmark FTSE 100 Index closed 9.18 points lower at 6,888.9, in a lacklustre session which saw the top flight shy away from 15-year highs.

Chris Beauchamp, senior market analyst at IG, said: “Today’s session has been like the good old days of the 2010-2012 eurozone crisis. Most of us had forgotten what those times were like, but we had an effective reminder today as first one headline and then another sent markets racing higher before immediately diving to earth.”

Much of the City’s attention was on Centrica after more than £1 billion was wiped from the value of the blue-chip giant following a cut in its dividend.

The group said it had taken the “difficult decision” to rebase its shareholder dividend, with the full-year pay-out for 2014 set to be 21 per cent lower at 13.5p. Shares dropped 24p to 257.1p.

Meanwhile, BAE Systems held firm despite reporting a £1.5 billion drop in sales to £16.6bn for 2014, as well as an 11 per cent fall in underlying earnings.

Chief executive Ian King expects a return to growth this year, helping shares firm 3.5p to 525.5p. Fellow defence products firm Rolls-Royce was at the top of the FTSE 100 risers’ board with a gain of 3 per cent or 27.5p to 962p.

Elsewhere in the top flight, commodity stocks were under pressure as the price of Brent crude oil dipped back below $60 a barrel. BP was 5.6p lower at 445.7p and Royal Dutch Shell eased 46.5p to 2,198p.

In the FTSE 250, drinks can maker Rexam surged 6 per cent or 32.5p to 569.5p after it backed a sweetened £4.4bn takeover offer from US rival Ball.