London shares fall after weak German data
London's leading share index fell back slightly on Friday amid fears over the economic outlook in Germany and over bank shares following Moody's downgrade of some of the biggest names including HSBC.
At the close of trade, the FTSE 100 index dropped 0.95 percent to 5,513.69 points. In Frankfurt, the DAX 30 dropped 1.26 percent to 6,263.25 points, while in Paris the CAC 40 slid 0.75 percent to 3,090.90 points.
"In a sense, Moody's downgrade of 15 major global banks was merely a sideshow," said Chris Beauchamp, a market analyst at IG Index trading group.
"The real story is a good deal more serious, as Germany is finally beginning to feel the pinch of the eurozone crisis."
Data showed that the debt crisis had pushed business confidence in Germany, Europe's biggest economy, to the lowest level for more than two years.
In Germany, the Ifo economic institute's closely watched business climate index fell to 105.3 points in June from 106.9 points in May.
It was the second month in a row that the index has fallen and brings the barometer to its lowest level since March 2010.
Back in London, the session's star performer was BT, which added 1.74% -- or 3.50 pence -- to close at 205.
This was closely followed by pharmaceutical giant Shire PLC, which inched up 1.13% -- or 22 pence -- to end the session at 1,966.
"Stocks that have been progressing well over the past few sessions are the traditionally defensive stocks sectors such as pharmaceuticals," said Fiona Cinotta, a market analyst at City Index, explaining their strong showing
In contrast, mining and engineering stocks dragged the index further into the red with Mexico-based miner Fresnillo the biggest faller, down 4.96% -- or 74 pence -- to 2,101.
Engineering giant Petrofac was also under heavy selling pressure, down 4.66% -- or 67 pence -- to stand at 1,371.
The sell-off in mining issues was caused by doubts over "the lack of pace for the global recovery as investors decided to give their worries about Europe a rest for once," said David Jones, the chief market strategist for IG Index.
Lloyds Banking Group (LBG) and the telecom behemoth Vodafone remained the most traded issues, seeing 165 million and 76.2 million units changing hands respectively.
On the currency markets, sterling slid back against both the euro and the dollar.
At 17:36, the pound was trading at $1.5587, down from $1.5592 at the same time Thursday.
The British currency also eased against the single European currency, down to 1.2409 euros from 1.2434 over the same period.
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