FTSE slides as markets fear Greek troubles may spread

The FTSE 100 Index fell 69.18 points to 5341.93, or 1.3 per cent, as fears of the crisis spreading to other countries refused to die away.

The Cac 40 in France and Germany's Dax fell 1.3 per cent and 0.8 per cent respectively, although America's Dow Jones Industrial Average steadied after losing 1 per cent early on.

Worries remain over Greece's ability to deliver on austerity measures in return for the weekend's 110 billion euro (95bn) bailout, with mass protests in Athens yesterday.

Ratings agency Moody's also warned it may downgrade Portugal in the next three months, a week after Standard & Poor's cut its rating and stoked market concerns that the Greek crisis was spreading through the eurozone.

The euro plummeted to its lowest level against the dollar for more than a year at 1.28, while the pound was also a beneficiary of the single currency's weakness as it strengthened to almost 1.18 at one point.

Sterling was steady at around 1.51 against the greenback.

"Markets seem to be trading on the assumption that Greece is merely the canary in the coalmine and that fiscal contagion is now inevitable," IG Index market analyst David Jones said.

In the US, signs of a recovery in the labour market grew yesterday as data on the private sector labour market showed job gains for the first time since January 2008.

Other data showed the pace of growth in the US services sector was unchanged in April compared with the month before and expanded below the rate forecast by analysts.

The private sector added 32,000 jobs in April, according to a report by payrolls processor ADP Employer Services. Economists had expected a rise of 30,000 jobs.

Among the handful of risers on the London market were Fresnillo and BHP Billiton, up 431/2p to 807p and 21p to 1886p respectively.

But other heavyweight commodities stocks continued their recent steep decline in a mixed session for the sector. Kazakhmys was chief among these, ending the session as the leading Footsie faller. Shares were down 61p to 1239p. Oil giant BP finished higher as analysts said the recent falls in the wake of the Gulf of Mexico oil spill looked overdone, helping shares add 61/2p to close at 565p. The firm has made progress with dealing with the leak on the seabed.

Financial shares tumbled onto the fallers' board, with part-nationalised firms Lloyds Banking Group off 2 per cent – or 11/8p to 601/8p – while Royal Bank of Scotland fell 3/8p to 503/8p.

In corporate news, Next lost 76p to 2181p – despite saying it was on track to grow sales and profits this year.

The retailer said it remained "very cautious" about the trading outlook.

A number of stocks were also in the red as they turned ex-dividend, meaning that new investors will not take part in the next shareholder payout.

This left supermarket Morrisons down 101/2p to 2783/4p and Royal Dutch Shell off 62p to stand at 1840p.

In the FTSE 250, pubs group JD Wetherspoon was almost 10 per cent lower, down 513/4p to close at 4913/4p, as the firm forecast a gloomier outlook and revealed sales had deteriorated in the last three months.

The biggest Footsie risers were Fresnillo, BP, BHP Billiton and Rio Tinto which ended the day 27p higher at 31891/2p.

The biggest Footsie fallers were Kazakhmys, International Power off 15p to 3177/8p, Whitbread down 60p to 1460p and Man Group which closed the session 91/8p worse off at 227p.