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FTSE dips below 6,000 as EU prepares for Greek default

by Rob Mackinlay on Jul 11, 2011 at 09:38

FTSE dips below 6,000 as EU prepares for Greek default

Banks and BSkyB dominated losers on the FTSE 100 as investors looked for direction on big picture questions such as the Italian bond yields, eurozone talks on a partial Greek default and prospects for the US economy after Friday’s poor jobs data.

The FTSE 100 dropped 0.18%, or 10.8p, to 5,979.8.

BSkyB (BSY.L) tumbled a further 6.9%, or 52p, to 698.5p as police widened their inquiries into the phone hacking scandal at the News of the World and Labour threatened to hold a parliamentary vote on News Corp's bid to take control of the satellite broadcaster. 

Commenting before the market opened Ian Whittaker of Liberum Capital said further weakness 'could be a good entry point for fundamental investors'.

Banks weakened ahead of stress test results from the European Banking Authority on Friday. Barclays (BARC.L) fell 1.7%, or 4.1p, to 239p; Lloyds (LLOY.L) lost 1.3%, or 0.6p, to 45.9p; and RBS (RBS.L) fell 1.7%, or 0.63p, to 36.5p.  

The biggest gainer was International Power (IPR.L), recovering 2.66%, or 80p, to 309.3p after Australia's new carbon tax proved to be less punitive to energy companies than had been feared.

Northumbrian Water (NWG.L) jumped 4.7%, or 20p, to 446.3p after Li Ka-shing, Hong Kong's richest man, pitched his takeover approach at 465p per share, 21% higher than previously expected. This values the utility at £2.4 billion. Severn Trent (SVT.L) shares gained 0.8%, or 12p, to £15.11 in response.

Harry Potter publisher Bloomsbury Publishing (BLPU) fell 3% or 4p to 129p as it complained of difficult retail conditions and announced the £20.1 million ($32.3 million) acquisition of Continuum International Publishing. It said the deal would boost its academic and professional division, an area which it wishes to expand.

Recruiter Michael Page International (MPI.L) gained 11p, or 2%, to 545p after posting a 32% increase in second quarter profits. It expects full year profits to be broadly in line with current market expectations of £111.7 million.

Centamin Egypt (CEY.L) nudged 0.24% or 0.3p higher to 127p after making a recommended £7.48 million offer for Sheba. The company, which is listed on the Plus exchange, owns and operates three gold mines in northern Ethiopia. Although this is Centamin's first move outside Egypt, the Sheba mines fall within the Nubian Shield, which includes the miner's flagship Sukari gold mine.

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