FTSE plunges on euro fears

BRITAIN’S blue-chip index fell to a two-month low yesterday, dragged down by commodity stocks after reduced prospects for fresh US stimulus and deepening concerns over the Eurozone’s debt and growth outlook weighed on risk appetite.

The FTSE 100 index closed at 5,703.77, down 134.57 points, or 2.3 per cent – its steepest fall since mid-December. Every stock in the index lost ground yesterday.

It still outperformed Europe peers, however, with both France’s CAC 40 and Germany’s DAX down between 2.8 per cent and three per cent, weighed by weak regional economic data and warnings from European Central Bank chief Mario Draghi on the outlook for the Eurozone’s periphery.

However, after a strong first-quarter rally which saw the FTSE rise more than 3.5 per cent, the market consolidation was to be expected, analysts said.

Mining and energy stocks were the biggest drag on the index and International Power was among the most traded, seeing volume nearly three and a half times its 90 day average after the electricity supplier rejected a takeover bid.