Banks pull FTSE back as Greece crisis festers

The FTSE 100 tracked losses across Europe in early trading as the negotiations in Athens over Greece's disastrous finances showed few signs of success.

Greece and its private creditors have so far failed to come up with an agreement on debt swap talks, needed to avoid a default.

Meanwhile a European summit focused on growth and the region's debt was about to open.

The summit, due to start at 2pm in Brussels today, is supposed to focus on economic growth but discussions over a permanent rescue fund but Greece will inevitably be top of the agenda.

EU leaders are expected, though, to sign off on a permanent rescue fund for the Eurozone

Banking stocks, many of which have exposure to Eurozone peripheral debt, were hit with the STOXX Europe 600 Banks index down 1.6 per cent.

The sector was also the worst hit in London as it mirrored European markets. RBS was down 2.7 per cent after its chief executive Stephen Hester waived his near £1m bonus following public pressure.

Lloyds dipped by the same level while Barclays was off by two per cent as Greek debt woes cast a shadow. Asia focused Standard Chartered nudged down by 2.3 per cent, while investment bank Schroders lost 2.5 per cent.

However the steepest faller on the index in early trading was miner Evraz which was down by more than three per cent after metals prices dropped.

There were few significant risers with iPhone chipmaker Arm Holdings up 0.5 per cent, Vodafone, 0.3 per cent, and National Grid 0.3 per cent.

Pharmaceuticals giants GlaxoSmithKline and Astrazeneca saw slim gains.

FTSE 250-listed Ryanair saw its shares lift by 1.6 per cent after raising its profit forecast.

Meanwhile in Asia the Nikkei closed down 0.5 per cent and the Hang Seng 1.6 per cent as the lack of progress in Greece had reverberations across the globe.