London close: Stocks plummet on Eurozone fears

4th Apr 2012 16:31

- Miners lead fallers as commodity prices fall- ECB keeps rates on hold, Fed quashes QE3 hopes- Spanish, Italian yields soarNo stocks finished in positive territory on Wednesday as Eurozone concerns and fading hopes of additional stimulus in the US fuelled a mass sell-off. The Footsie managed to finish just above 5,700, a level which it has not closed under since late January.Investors seemed to shrug off some relatively positive economic data closer to home, which saw both activity and new business in the UK service sector grow at a stronger-than-expected rate in March. Spain this morning issued €2.59bn euros in short- to medium-term government debt, the bottom part of its €2.5-3.5bn target range. The auction saw bid-to-cover rates broadly fall and yields rise. On the secondary market before the close, Spanish 10-year yields jumped 23.9bp to 5.68%, while Italian yields rose 21.8bp to 5.37%. Also weighing on sentiment were the minutes of the March 14th Federal Open Market Committee (FOMC) meeting which showed that members had become less inclined to boost the economy through quantitative easing. Meanwhile, as expected, the European Central Bank (ECB) left its key interest rate unchanged for the fourth month in succession. The rate has been set at a record low rate of 1% since November 2011. In the press conference that followed the decision, ECB President Mario Draghi said that the recent LTRO three-year loans have "helped avoid a major credit crunch". Providing further gloom were Eurozone retail sales which were a little weaker than expected in February, with Germany among the countries showing tepid demand from consumers. The Eurozone Retail Sales index fell 0.1% in February, after rising a revised 1.1% in January. The consensus was expected a flat reading. MINERS DROP AS METALS PRICES TUMBLEThe resulting effect of the FOMC statement was a stronger dollar - the dollar index, which measures the greenback against a basket of six other currencies, was up 0.59% before the close in London - meaning that dollar-denominated commodities became more expensive. With silver, copper and gold prices taking a hit, the miners bore the brunt of the selling today with Fresnillo topping the list falling over 8%. Evraz, Polymetal and Antofagasta also suffered heavy losses.Wolesley and Pearson were also providing a drag on the FTSE 100 after going ex-dividend. Elsewhere, Bodycote, Interserve and Phoenix Group were among the other stocks trading without the rights to their latest dividends. High street retailer Next fell after it was revealed last night that its Chief Executive Officer Simon Wolfson sold off 125,000 shares in the firm. Sector peers Marks & Spencer and Kingfisher were also lower. Shares in power producer International Power were slightly lower after the board rejected the indicative 390p-a-share offer from majority shareholder GDF SUEZ, saying that it undervalues the company. FTSE 250: BTG IN DEMAND, WHILE KENTZ FALLS BTG, the specialist healthcare company, was among the handful of stocks to finish in the blue on the second-tier index after it upped its full year revenue guidance following a strong showing at its licensing & biotechnology business. The firm is raising its revenue estimate for the year ended March 31st 2012 from a forecast of £160m-£165m to £190m-£195m. Engineering services group Kentz however took a tumble after announcing that two non-executive directors are to substantially reduce their shareholdings. Kerbet, a company which represents the holdings of Tan Sri Mohd Razali Abdul Rahman and Hassan Abas, intends to sell 12m Kentz share via a secondary placing. Tan Sri Mohd Razali Abdul Rahman is Chairman of Kentz. FTSE 100 - RisersFTSE 100 - FallersFresnillo (FRES) 1,533.00p -8.26%Evraz (EVR) 353.60p -6.85%Man Group (EMG) 122.80p -5.61%Schroders (Non-Voting) (SDRC) 1,142.00p -5.23%Barclays (BARC) 218.50p -5.14%BG Group (BG.) 1,409.00p -4.86%Wolseley (WOS) 2,322.00p -4.76%Weir Group (WEIR) 1,705.00p -4.70%GKN (GKN) 198.90p -4.60%Hargreaves Lansdown (HL.) 465.60p -4.51%FTSE 250 - RisersPayPoint (PAY) 670.00p +5.59%BTG (BGC) 347.10p +2.60%Daejan Holdings (DJAN) 3,285.00p +1.70%BH Global Ltd. USD Shares (BHGU) 11.85 +1.28%PZ Cussons (PZC) 320.10p +0.98%Hansteen Holdings (HSTN) 74.25p +0.95%KCOM Group (KCOM) 72.50p +0.83%SDL (SDL) 748.00p +0.81%Regus (RGU) 114.00p +0.71%Anglo Pacific Group (APF) 302.00p +0.63%FTSE 250 - FallersExillon Energy (EXI) 141.00p -9.90%Kentz Corporation Ltd. (KENZ) 437.80p -7.44%Talvivaara Mining Company (TALV) 223.10p -7.43%Logica (LOG) 91.55p -7.34%Home Retail Group (HOME) 109.40p -7.21%Kenmare Resources (KMR) 48.12p -7.19%Heritage Oil (HOIL) 141.50p -7.09%Amlin (AML) 315.90p -6.98%Kesa Electricals (KESA) 63.55p -6.82%Centamin (DI) (CEY) 63.20p -6.78%BC