Investors retreated today as gloom about Europe's economic prospects returned when credit ratings agency Moody downgraded France from its top rating.

London's FTSE 100 Index, which rallied more than 2% last night on optimism that the US will duck the looming package of automatic tax increases and spending cuts, fell 16.7 points to 5720.1.

The decline came on news that France's debt rating had been reduced from AAA to AA1, triggering falls for continental markets ahead of a meeting of eurozone finance ministers later today to discuss Greece's next tranche of aid.

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Low-cost airline easyJet topped the FTSE 250 Index risers board after profits at the carrier climbed to a record £317 million as higher sales offset a further £182 million surge in fuel costs.

Shares were up by more than 4%, up 34p to 688p, after the company also doubled its annual dividend payout to shareholders to 21.5p a share.

Further restructuring efforts at Premier Foods were welcomed by investors today, even though it will mean the loss of around 900 jobs and the closure of two bakeries. Its shares gained 4%, up 3.75p to 96.5p, as the City welcomed efforts by the company to offset intense competition.