FTSE flat after Slovak vote blow

City A.M. Reporter
The FTSE 100 was flat this morning after Slovak lawmakers rejected a plan to expand the Eurozone rescue fund and the US earnings season kicked off with disappointing results.

Slovakia's decision rattled world markets as the plan — which would see Greece saved from economic abyss through new loans — is central to hopes that the Eurozone economy can be nursed back to health.

Slovakia is the only country in the 17-member currency zone that has yet to approve the plan.

Meanwhile investors were also eyeing reports suggesting that Europe's banks will be forced to achieve a significantly stronger capital position, in a new wave of regulation.

In London the index spluttered in early trading after the US corporate earnings season started with aluminium producer Alcoa profits dented by the economic slowdown.

Jobless figures showing that UK unemployment rose by 114,000 between June and August to a 17-year high of 2.57m were also in the spotlight.

Hedge fund giant Man Group was the biggest faller, down more than five per cent as it continued to be hit by a market update which showed that client funds had been dealt a blow by market volatility over the summer.

Miner Fresnillo was down just over four per cent while Tullow Oilwas off by 2.8 per cent.

In the banking sector Schroders was the biggest loser, down by 1.8 per cent.

Lloyds nudged down by 1.7 per cent, RBS 0.7 per cent and HSBC 0.8 per cent. Barclays was up 0.14 per cent.

BAE Systems was dented by around one per cent after it reported resilient trading but said that markets were still tough.

On the upside Burberry rose by more than one per cent after a market update in which it said it was ahead of forecasts, spurred by ever growing sales in China.

InterContinental Hotel Group was the biggest climber, up 1.7 per cent.

Three miners, Kazakhmys, Eurasian and Randgold Resourceswere also up over one per cent after a difficult session for commodities yesterday.

On the FTSE All-share Speedy Hire was up more than three per cent after giving a positive trading update.

Meanwhile ex-dividend factors knocked 2.70 points off the FTSE 100 with Capital Shopping Centres, Old Mutual, Smith & Nephew,Tesco, Wolseley, and WPP Group all losing their payout attractions.

In Asia the Hang Seng closed up 1.04 per cent while the Nikkeidipped by 0.4 per cent.

Across the Atlantic later the latest weekly mortgage and refinancing indexes will be released, with the minutes of the Fed's latest Open Market Committee (FOMC) meeting also due to be published.