Market blog: Facebook frenzy as FTSE logs worst week of 2012

17.39: Britain’s FTSE 100 dropped 1.33%, or 70 points, to 5,268 and the Mid-250 index gave up 1.52%, or 161 points, to 10,432 on Friday. See the FTSE’s performance and the index’s top risers and fallers.

The decline brings to a close a week in which the FTSE 100 lost 307.9 points, or 5.52%, equivalent to £79.76 billion, and logged its worst performance since the first week of August, when the markets balanced on the precipice of eurozone turmoil.

European officials conceded that contingency plans are being prepared for a Greek exit from the monetary union as German finance minister, Wolfgang Schaeuble, said he expects the crisis in the region to continue for the coming 12 to 24 months. 

Investors were also rattled by comments from Monetary Policy Committee member Adam Posen, who said he feared he was previously too optimistic about the outlook for the UK economy and announced his intention to leave the committee at the end of August.

European stock markets continued their decline: Germany’s DAX index lost 0.6% to 6,271, France's CAC 40 index shed 0.13% to 3,008, and the FTSEurofirst 300 index of top European shares gave up 1.18% to 970.

Facebook float

The highly anticipated market launch of social network Facebook on Friday afternoon saw shares open 11% higher than their anticipated price of $38 (£24) as more than 80 million shares were bought in the first minute of trading.

The Dow Jones Industrial Average trimmed 0.1% to 12,431, the Standard & Poor's 500 index slipped 0.48% to 1,299, and the Nasdaq Composite index reversed 0.19% to 2,808.

Oil prices slid as eurozone tremors pushed prices down: Brent crude for delivery in next month shed 0.16% to $107.32 per barrel and West Texas Intermediate crude for next month delivery fell 0.48% to $92.12.

Financial stocks weighed on the FTSE 100 index led by Lloyds (LLOY.L) down 1.7p, or 6.1%, to 26p and Royal Bank of Scotland (RBS.L) reversed 1.1p, or 5.1%, to 19.9p.

09.15: The FTSE 100 lost 0.82%, or 44 points, to 5,294 and the Mid-250 index gave up 0.99%, or 105 points, to 10,488 on Friday morning amid rising eurozone contagion fears. See the FTSE’s performance and the index’s top risers and fallers.

Credit ratings agency Moody’s downgraded 16 Spanish banks overnight including BBVA and the UK arm of Santander, which was downgraded by three notches from Aa3 to A3. The agency cited recession and high levels of bad debt on the banks’ books as the motivation for the downgrades.

Spanish prime minister Mariano Rajoy warned that the cost of borrowing for the country could become ‘astronomical’ as the yield on benchmark 10-year Spanish bonds narrowed six basis points to 6.311%.  

Wall Street and Asian markets closed in the red and European markets started another day on the back foot: Germany’s DAX index shed 0.59% to 6,272, France's CAC 40 index trimmed 0.8% to 2,987, and the FTSEurofirst 300 index of top European shares reversed 0.89% to 973.

The euro slipped further against the dollar, down 0.08% to $1.267 and the pound trimmed 0.01% to $1.578.

In the US, the much-anticipated initial public offering (IPO) of Facebook will begin later in the day. Its share price has been set at $38 (£24), valuing the company at $104 billion (£65 billion) when it goes to market on the Nasdaq index. Chief executive and co-founder, Mark Zuckerberg, will see his stake in the company valued at $19 billion, making him one of the richest men in the world.

Pharma group GlaxoSmithKline (GSK.L) was knocked back 4p, or 0.3%, to £14.05 as its 81% premium bid offer for Human Genome Sciences was rejected by its board of directors.

Miners weighed on the FTSE 100 index as Rio Tinto (RIO.L) lost 59p, or 2.1%, to £27.96; Vedanta Resources (VED.L) shed 20p, or 2%, to 965p; and Xstrata (XTA.L) fell 17.2p, or 1.8%, to 939p.

Citywire Top Stock Kenmare Resources (JEV.L) gave up 1.4p, or 3.3%, to 41.1p.

Telecoms provider BT Group (BT.L) rose 1.1p, or 0.54%, to 203p as analysts at Berenberg upped their target price from 220p to 245p and raised their outlook on the stock from ‘hold’ to ‘buy’.