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FTSE 100 falls as banks and oil firms drop |
London share prices fall back 0.6% |
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(about 5 hours later)
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Falling shares in banks and oil companies weighed on the London market. | Share prices in London fell on Monday and the FTSE 100 index closed 41 points lower to 6,799, a drop of 0.6%. |
Shortly after midday, the benchmark FTSE 100 index was down 49.08 points, or 0.7%, at 6,791.67. | The biggest fallers were Next, down 2.7%; Royal Bank of Scotland, down 2.6%; and BT Group, down 2.4%. |
Bank shares across Europe were hit by nerves surrounding Italy's banking sector ahead of a referendum on constitutional reforms next weekend. | One issue concerning UK investors is the result of the forthcoming bank stress tests, which will be published by the Bank of England on Wednesday. |
Reports suggest several Italian banks could be in trouble if Italian prime minister Matteo Renzi fails to win backing for the reforms. | In the FTSE 250, shares in Capital & Counties jumped 8% after an upbeat trading statement. |
Royal Bank of Scotland was the biggest faller in the FTSE 100, down 2.7%, while Lloyds was 2.1% lower. | Elsewhere in Europe shares fell, dragged down by bank shares. |
The UK banking sector is also waiting for the results of the latest bank stress tests, which will be published by the Bank of England on Wednesday. | Investors continue to worry that the troubled Italian bank Monte dei Paschi may fail to raise €5bn required to bolster its finances. |
Shares in oil giants Royal Dutch Shell and BP were both down as the price of oil fluctuated ahead of a meeting of the Opec oil producers this week. | On the currency markets, the pound fell 0.6% against the dollar to $1.24, and dropped 0.4% against the euro to €1.17. |
Oil prices had fallen 3% on Friday, and they slid again on Monday before recovering. | |
Opec is meeting on Wednesday, but it remains uncertain as to whether the group will agree cuts to oil output in order to rein in global oversupply. | |
Retail shares were also under pressure on Monday. Shares in Marks and Spencer fell 2.7% while Next was down 2.5%. | |
In the FTSE 250, shares in JD Sports rose 3.6% after the retailer said it had bought the 58-store Go Outdoors chain for £112.3m. | |
On the currency markets, the pound fell 0.7% against the dollar to $1.2398, and dropped 0.8% against the euro to €1.1683. | |