Barclays (BARC) Plc, Royal Bank of Scotland Group Plc (RBS) and HSBC Holdings Plc (HSBA) tumbled at least 3 percent as Spain cut its growth forecast and as the region of Valencia sought a bailout. Resolution Ltd. (RSL) lost 5.4 percent as the insurance buyout firm canceled plans to return capital to shareholders. Vodafone Group Plc slid 1.7 percent after Europe’s biggest mobile-phone company posted service revenue that trailed analyst estimates.
The FTSE 100 lost 62.42, or 1.1 percent, to 5,651.77 at the close of trading in London, sending the gauge down 0.3 percent this week. The broader FTSE All-Share Index and Ireland’s ISEQ Index each fell 1 percent today.
“Financial markets have had a turbulent day as the euro- zone debt drama returned to the fore, knocking appetite for risk,” said Ishaq Siddiqi, a market strategist at ETX Capital. “Peripheral bond yields are back on the rise, with Spain’s 10- year passing the 7 percent mark, a level regarded as unsustainable by markets.”
All but 17 companies fell on the FTSE 100 (UKX) today, led by financial and basic-materials companies. Spanish bonds plunged, pushing the extra yield investors demand to hold the nation’s 10-year securities instead of similar-maturity German bunds to a euro-era record.
Spain forecast its recession will extend into next year as the region of Valencia said it would tap an emergency-loan fund created last week. Regions in Spain face about 15 billion euros of debt redemptions in the second half, with Catalonia and Valencia the most indebted states.
Barclays slid 3 percent to 159.25 pence, RBS dropped 3.6 percent to 204.7 pence and HSBC, Europe’s largest bank, declined 3 percent to 533.2 pence.
Resolution tumbled 5.4 percent to 215.5 pence after the insurance buyout firm canceled plans to return 250 million pounds ($392 million) to shareholders, citing economic and regulatory uncertainty. The shares had climbed 12 percent over the previous eight days.
Vodafone lost 1.7 percent to 180 pence after reporting a 0.6 percent increase in service revenue, excluding currency swings and acquisitions for the first quarter. That trailed analysts’ average estimates for 0.8 percent growth, according to a Bloomberg survey. Total sales fell 7.7 percent as consumers and companies in Spain and Italy cut spending.
London Stock Exchange Group Plc (LSE) fell 1.6 percent to 1,007 pence. The shares reversed a gain of as much as 2.6 percent after Singapore Exchange (SGX) Ltd. said it has not engaged in any merger talks with the U.K. bourse.
The Telegraph reported yesterday that Magnus Bocker, the chief executive officer of Singapore Exchange, had a series of informal conversations with LSE CEO Xavier Rolet in recent weeks, without saying where it got the information. LSE declined to comment when contacted by Bloomberg News.
Segro Plc (SGRO) fell 3 percent to 230.1 pence after Bank of America Corp. downgraded the U.K.’s largest publicly traded owner of industrial properties to neutral from buy, citing a risk that the company may have to sell more non-core assets as values decline.
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