Monday blues hit FTSE as debt issues dominate

Mon, 16th May 2011

After shedding around 1 per cent in last week's trading, the FTSE 100 index continued its descent on Monday, dropping 0.9 per cent to hit 5875 by 11.15 BST, not far above the April low point of 5858. Concerns over global growth and eurozone debt resurfaced with investors in a cautious mood.

Energy firms had a tough day as the price of crude oil dropped further, sliding by around 2 per cent. The price of the so-called liquid gold is being hit hard by the sentiment over global growth as well as a strengthening dollar. The dollar index is currently at its highest point in over a month. One of the fallers in the sector was John Wood Group, dropping by 1.9 per cent, with the oil services provider's announced plans for a share buyback not enough to woo investors.European finance ministers were in further talks over how to solve the Greek problem as well as the package for Portugal, with the meeting pressing ahead despite the head of the IMF, Domique Straauss-Kahn being detained by the police for sexual assault charges.The mining industry enjoyed some much-needed interest as experts recommended a buy-out of shares following recent unwarranted drops in the sector. Broker Citigroup told investors to expect a 'slowdown' but not a collapse and suggested purchases of top-name stocks in the sector would provide good returns. The broker's own preferences were First Quantum, Rio Tinto and Xstrata, all adding between 2.1 and 0.2 per cent. Antofagasta also profited from an upgrade in rating from Citigroup, resulting in a climb of 0.6 per cent.
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