The FTSE 100 Index weathered the latest eurozone storm today after plans for a levy on bank deposits in Cyprus had earlier threatened to derail markets.
City analysts were shocked by Europe’s bailout proposal for Cyprus, which they warned could spark an exodus of capital from other fragile economies and jeopardise the region’s recent tentative recovery.
With Cypriot politicians not due to vote on the proposal until tomorrow evening however, the FTSE 100 Index recovered to close 0.5% or 31.7 points lower at 6,457.9.
Despite London’s resilient session, banking stocks came under pressure from the European uncertainty, with Royal Bank of Scotland down 10.6p at 297.3p, Barclays off 14.1p at 305.95p and Lloyds Banking Group 0.7p lower at 49.85p.
The focus of investors was also on Marks & Spencer after a reports that Qatar’s sovereign wealth fund is in talks with private equity groups and banks about a possible bid approach worth £8billion.
Shares were up 7% or 25.6p to 398.1p – adding £350million to its market value – even though there was no official stock market announcement to confirm or deny the speculation and Qatari sources denied interest.
Elsewhere, insurer Legal & General was 0.8p lower at 172.4p after announcing that it had bought 46% of housebuilder Cala Group from Lloyds in a £210million joint deal with private equity firm Patron Capital Partners.
The biggest FTSE 100 Index risers included Aberdeen Asset Management ahead 9p at 420.3p, Babcock International up 19p at £10.90 and Tate & Lyle ahead 14.5p at 832.5p.
Among the biggest fallers were Eurasian Natural Resources down 24.9p at 321.9p and Polymetal Industries down 35.5p at 880.5p.
Elaine McLachlan, of investment manager and financial planning specialist Brewin Dolphin in Inverness, noted that risers included Plexus Holdings, up 2.1% at 221.63p, and Indigovision 1.7% ahead at 335p.
Fallers included Xcite Energy, off 3.7% at 116.25p, Wolfson Microelectronics down 3.6% to 184.13p and Parkmead down 3.5% at 13.75p.