LONDON’S leading shares index lost more than 1% today as a series of protests against austerity measures across Europe rattled investor confidence.
The FTSE 100 Index closed 64.2 points lower at 5722 as general strikes in Spain and Portugal and walkouts in Greece and Italy kept the eurozone debt crisis at the forefront of investors’ minds.
Figures revealing the first fall in US retail sales for four months – in part due to the effects of superstorm Sandy – also dampened the mood.
There was a further hit to sentiment after Bank of England governor Sir Mervyn King gave a gloomy economic outlook for the UK as the Bank slashed its growth forecast to around 1% next year.
The pound fell against the US dollar and euro after the Bank said inflation would fall back towards target by the end of 2013.
In a busy session for corporate news, solid results from supermarket Sainsbury’s failed to inspire further share gains.
The chain, which increased half-year underlying profits by 5% to £373m, slipped back 8.4p to 338.8p, having made decent headway in the year to date.
The focus of investors was also on the energy sector after results from Southern Electric owner SSE and German utility giant RWE.
A revised earnings forecast from E.ON knocked confidence yesterday, but this was offset by RWE saying it now expects to “at least match” last year’s pre-tax and operating earnings figures.
The biggest FTSE 100 risers were Centrica up 7.5p at 318.3p, Amec ahead 23p at 1056p, Bunzl up 13p at 1043p and SSE ahead 17p at 1400p.
The biggest FTSE 100 fallers were Evraz down 16.4p at 217.4p, Randgold Resources off 355p at 6575p, Eurasian Natural Resources down 13.4p at 276.2p and Burberry off 51p at 1180p.