FTSE slumps as fears over eurozone debt contagion spread

Britain's blue chips plunged downwards in the first session of the week as concerns over the vulnerability of the single currency hit investors. By the close of the day, the FTSE 100 index had plummeted by 1.9 per cent to reach 5835, the lowest level seen in two months.

Chris Bradshaw
shareprices.com - Monday, May 23, 2011

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The weekend's news was dominated by a worsening in the debt crisis in Europe, with Greece being downgraded to a B+, three rankings down and a warning being placed over the outlook for Italy by another credit agency. With the protests in Spain over austerity measures, experts cited concerns over contagion as a very real possibility.

The lack of market confidence hit metal prices, coupled with a drop in demand from China, leading to a drop in the mining sector. Copper prices were particularly badly hit, with the amount of refined copper being imported by China down 48 per cent according to April's year on year figures. Anglo American was the biggest casualty in the sector, dropping 4.1 per cent but hot on its heels was Antofagasta with a slide of 3.9 per cent.

The appearance of another ash cloud from Iceland brought bad memories back for many, but despite assurance from British airlines, travel firms fell as the weather experts predicted the movement of ash to float across Scotland. International Airlines Group dropped 5.1 per cent and TUI Travel shed 3.1 per cent. Ryanair was another poor performer as it increased fares, sending its share price tumbling by 5.1 per cent.

 

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