Weaker financials outweigh popular Randgold Resources as Footsie falls

FTSE: 5,938.66 (–9.64) Mid-250: 11,617.83 (–58.61) Small Cap: 3,222.50 (–37.92)BRITISH BANK shares fell on further concerns about the state of finances in the peripheral euro zone countries, dragging the country's top shares lower by the close yesterday and ending a six-day winning run.

Ireland said its four remaining banks required another €24 billion ($34.1 billion) to enable them to withstand potential losses from a worsening of the economy.

“We saw equity markets suddenly slide very rapidly towards the close with the bankingsector slipping back quite considerably,” said Michael Hewson, market analyst at CMC Markets.

“What we have seen in the closing auction (in the FTSE 100) is an early indication of what the market thinks of it,” he said.

Fears about the state of finances in some poorer euro zone countries had already been heightened when it was revealed that Portugal’s deficit was more than a percentage point above target at 8.6 per cent of GDP.

Europe’s largest bank, HSBC, fell 2.3 per cent while Barclays lost 2.3 per cent and insurer Prudential was down 2.1 per cent.

Firmer commodity prices lifted some miners and energy firms, preventing heavier losses.

West African-focused gold miner Randgold Resources was the top gainer, up 8.8 per cent after it said it was sticking with the production forecast for 2011 which it gave early last month, even though the unrest in the Ivory Coast, home to its newest mine, has since worsened.

Shares in Vedanta Resources added 2.8 per cent after a press report raised hopes of a green light for its planned purchase of a stake in Cairn Energy’s Cairn India unit.

Chip designer ARM climbed 2.2 per cent, boosted by Bank of America Merrill Lynch upgrade.

Retailers continued a poor run, with a profit warning from mid-cap Mothercare further shredding sentiment on the sector.

Kingfisher slipped 3.3 per cent.

ITV, whose biggest source of revenue is advertising from retailers, was the top faller, down 3.9 per cent.

Vodafone, the world’s largest mobile operator by revenue, shed 1.9 per cent after it said it would pay $5 billion to buy out Essar from its Indian joint venture.

International Power slipped 2.3 per cent after JPMorgan expressed concerns over potential downgrades in the consensus market forecast for earnings and limited newsflow. – (Reuters)