EU aid package for Greece fails to inspire confidence

The top flight finished 24.63 points lower at 5703.02 despite European leaders agreeing an aid package for Greece and US markets opening on the front foot.

Wall Street made early progress after an overnight sell-off, with stocks helped by consumer confidence figures although the latest revision to US output in the final three months of 2009 fell short of hopes.

The US economy grew at a slightly less brisk pace in the fourth quarter than previously estimated and the momentum is expected to slow this year as the boost from inventories fades.

While the report yesterday – which also showed continued strength in corporate profits – was evidence the economy emerged from recession in the second half of 2009, underlying growth was not robust enough to cut high unemployment.

Separately, worries about jobs kept consumer confidence unchanged this month from February.

"We are still in a lukewarm expansion," said Zach Pandl, US economist at Nomura Securities International in New York.

With any corporate news thin on the ground in London, it was a mostly uneventful day for the blue-chip index, which has been temporarily expanded to 101 firms in the wake of the Cable & Wireless demerger.

The pound was down to just 1.11 against the euro as the single currency strengthened on news of the summit deal, and languished below 1.49 against the dollar.

In corporate news, Cable & Wireless completed its long-awaited demerger, with two separate companies now listed in the top flight – meaning the FTSE 100 contains an extra company until Tuesday.

C&W Worldwide, which provides services to the world's largest users of telecoms, advanced by 3 per cent, or 3p, to 921/4p.

But, C&W Communications, the operator of services in 38 local markets, instead fell 61 per cent, or 911/4p, to 563/4p.

Oil and gas firm Cairn Energy was a strong performer as the stock continued to gain from its announcement of much higher output from its Indian assets earlier in the week.

The shares rose 71/4p to 4337/8p yesterday as Citigroup lifted its target price.

International Power was on the wrong end of broker comments, however, as JP Morgan cut its rating on the stock and sent shares down 123/4p to 3167/8p. Scottish & Southern Energy – also out of favour with JP Morgan – lost 24p to 1102p.

Hedge fund giant Man Group was one of the biggest fallers as investors gave the thumbs-down to reports that the company is eyeing expansion in the US. Shares fell 9p to 2423/8p.

HMV was the star performer in the FTSE 250 after it released further news on its strategy update for the next three years.

The Waterstone's owner soared 10 per cent – 81/4p to 87p – after it revealed plans to boost its live music and festival division, while implementing a turnaround plan at its under-pressure book chain.

Meanwhile, Durex-to-Scholl footcare consumer goods firm SSL International rose 91/2p to 808p after it said that strong sales of its key brands and new acquisitions had underpinned growth this year.

Elsewhere, collectables firm Stanley Gibbons rose 7 per cent, up 9p to 1301/2p, after it posted an 11 per cent rise in annual profits.

The biggest Footsie risers of the day were C&W Wwide, WPP up 181/2p to 6651/2p, Marks & Spencer ahead 8p to 3711/8p and Cairn Energy.

The biggest Footsie fallers of the session were C&W Comms, International Power, Man Group and Scottish & Southern.