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FTSE slides as doubts cast over dual bailout fund
by Caelainn Barr on Dec 07, 2011 at 14:26
(Update) The FTSE erased early gains as German officials poured cold water on the prospect of a dual eurozone bailout fund.
The benchmark UK index of blue-chip shares lost 0.3%, or 19 points, to 5,550 and the Mid-250 index took on 0.24%, or 25 points, to 10,287.
Markets retreated as rumours circulated that German officials will oppose a dual eurozone bailout fund, with the European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM) both providing a backstop for eurozone economies.
Randgold Resources (RRS.L) rose to the top of the FTSE 100, adding 270p, or 4%, to £69.80 after analysts at Investec placed a ‘buy’ on the stock despite its reduced production forecasts.
Insurance group Resolution (RSL.L) took on 9.2p, or 3.57%, to 266p as Deutsche Bank raised its rating on the stock from ‘hold’ to ‘buy’.
See the FTSE’s performance and the index’s top winners and losers
Among Citywire Top Stocks Burberry (BRBY.L) gained 28p, or 2.2%, to £12.95 as analysts at Liberum raised their ‘buy’ target price to £15.35. BG Group (BG.L), Weir Group (WEIR.L), Unilever (ULVR.L) and Devro (DVO.L) all rose more than 1%. Vodafone (VOD.L) was the only Top Stock to post a fall.
More stock news at the end of this report
Doubts cast on dual bailout fund
Michael Hewson, analyst at CMC Markets, wasn’t suprised by the growing doubt. ‘It’s all about expectation management on the part of unnamed German officials. Earlier there was talk of a dual bailout fund.
‘A German spokesperson has now said it is unlikely to happen: quelle surprise! Two bailout funds does seem somewhat unlikely given that policymakers can’t even fund the one they already have, namely the EFSF, properly,' he said.
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- Burberry Group PLC (BRBY.L)
- Resolution Ltd (RSL.L)
- Micro Focus International PLC (MCRO.L)
- Carillion PLC (CLLN.L)
- Randgold Resources Ltd (RRS.L)
- BG Group PLC (BG.L)
- Weir Group PLC (WEIR.L)
- Unilever PLC (ULVR.L)
- Devro PLC (DVO.L)
- Vodafone Group PLC (VOD.L)