FTSE knocked by US default worry

BRITAIN’S leading share index slipped back yesterday, weighed by weakness in financial issues on fears of a possible debt default by the United States, with investors’ attention switching to precious metal miners and defensively-perceived sectors.

At the close, the FTSE 100 index was down 9.76 points, or 0.2 per cent at 5,925.26, snapping a four-session rally of over 3 per cent, but hanging on to the 5,900 level.

“Even though there are concerns about a US default on its debt repayments the markets seem convinced that a resolution will be agreed before the August deadline,” said Angus Campbell, Head of Sales at Capital Spreads.

Banks, which led last week’s rally, were the biggest blue chip casualties, with Barclays and Lloyds Banking Group the worst off, down 4.4 per cent and 4.2 per cent respectively.