London shares fall on eurozone jitters

London shares closed in the red on Tuesday as traders wondered if the US and European central banks would fight economic slumps with decisive monetary policies.

The FTSE 100 index was down by 1.02 percent at 5,635.28 points.

"Today has seen the first cracks start to appear in the rally that has seen the FTSE lifted by around 250 points over the past week, " said David Jones, Chief Market Strategist at IG Index.

"Results from BP and UBS that both fell short of expectations have taken some of the wind out of investors' sails," he added.

On Thursday, the ECB and the Bank of England unveil their latest monetary policy decisions, as both grapple with the eurozone debt crisis.

"The month is looking likely to end on a quiet note, as investors enter 'wait and see' mode in advance of policy decisions from the Fed, the Bank of England and the ECB," said analyst Chris Beauchamp at traders IG Index.

"As the important events get closer, the sunny optimism that suggested policymakers would unveil impressive new measures has been replaced by nagging uncertainty."

Lloyds Banking Group (LBG) remained the most-traded issue after investors exchanged 97.1 million units.

This was followed by Vodafone which saw 73.6 million units being sold.

Vedanta Resources was the top performer and saw its share price rise 48 pence -- or 5.17 percent -- to close at 976 pence after the miner reported a 27 per cent rise in first-quarter earnings

Sainsbury was also in demand with shares up 2.80 pence -- or 0.87 percent -- to close at 323.3.

Cement and building materials group CRH was the sessions biggest casualty as it saw its share price slide 71 pence -- or 5.77 percent -- to close at 1160 as one of its chief rivals, reported falling sales in Europe.

BP was similarly under pressure, down 70 pence -- or 3.56 percent -- to end the session at 1894 after plunging into the red during the second quarter.

The British energy giant made a loss after tax of $1.39 billion in the three months to June, hit by lower output, falling oil prices and a near $5.0-billion (4.1-billion-euro) writedown on the value of assets.

"We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically," chief executive Bob Dudley said in the statement.

"The effects of price movements have impacted our earnings in the quarter," he added.

On the currency markets, sterling fell both against the dollar and the euro.

At 17:04 BST, sterling fell to $1.5681 from $1.5710 at the same time Monday.

The British currency slipped to 1.2737 euros from 1.2814 over the same period.

Source: http://news.yahoo.com/london-shares-fall-eurozone-jitters-161418636.html

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