A MULTI-BILLION euro bailout for Spain's banks was not enough to appease traders' concerns over the embattled country as the London market closed 1% lower.
The FTSE-100 Index closed down 62.4 points at 5651.8 as Spain's borrowing costs remained in bailout territory despite the country receiving approval for a €100 billion (£80 billion) rescue package for its banks. Investors remained concerned that the Spanish government would need its own bailout, fuelled by reports that the Valencia region was set to seek help to refinance its debt.
The pound was at a near four-year high against the battered euro at 1.28, while sterling fell against the US dollar to 1.54.
Banking stocks were among the worst hit, given fears over their exposure, with Barclays down 5p at 159.3p, HSBC off 16.2p to 533.2p and part-nationalised Royal Bank of Scotland slipping 7.6p to 204.7p. Disappointing first-quarter figures from mobile phone giant Vodafone added to the rout. Vodafone shares fell 2% – down 3.1p to 180p – after posting a 7.7% decline in reported revenues, which came after a sharp slowdown in sales across emerging markets and a drop in UK revenues as it lost out to stronger competition from rivals.
G4S fell another 1.7p to 241.8p despite its insistence that losses on its Olympics security contract remained within the £35m to £50m range.
Clive Cowdery's insurance acquisition empire Resolution fell 5%, down 12.4p to 215.5p, after it cancelled plans to return £250m of excess capital to shareholders because of uncertain trading conditions. Outside the top flight, shares in Goals Soccer Centres kicked on 10% after it agreed a £73m takeover deal with Ontario Teachers' Pension Plan. Shares rose above Ontario's 144p-a-share offer price to reach 148.5p, a rise of 13.5p.
Cycle and car parts retailer Halfords gave back yesterday's gains seen on relief over news of a change at the top after chief executive David Wild stepped down following a profit warning. The group was down 7.6p to 198.2p.
The biggest Footsie risers were United Utilities, up 7.5p at 698p, Rexam, ahead 2.6p at 442.1p, BSkyB, up 4p at 697.5p, and ARM Holding, ahead 2.8p.
The biggest Footsie fallers were Evraz, down 16p at 234.4p, Resolution, off 12.4p at 215.5p, Royal Bank of Scotland, down 7.6p at 204.7p and International Airlines Group, off 5.3p at 154.8p.
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