Jittery European markets make small gains

Fears of a global recession and another woeful session for banking shares did not stop the London market from making nervous gains today.

The FTSE 100 Index gained 1% to close up 54.5 points at 5095.3 despite banking shares taking another hammering amid fears of contagion from the eurozone debt crisis and weaker prospects for the world economy.

Taxpayer-backed Royal Bank of Scotland was the biggest loser, falling 5% to 19.7p - the first time they have closed below 20p since March 2009.

The Government paid 50p per share for its 82% stake, meaning it has currently lost some £27 billion of its £45.5 billion bail-out money.

Taxpayer backed Lloyds Banking Group was down 0.8p at 27.6p, and Barclays was off 4.3p at 146.3p.

Despite today's rises, markets remain jittery after last week's poor economic data from the US and eurozone created fresh panic about the prospect of a global recession.

The glut of bad news caused London's blue chip index to suffer its biggest daily loss in nearly three years on Thursday, wiping £62.3 billion from the value of the UK's 100 biggest companies.

In another session of volatile trading today, London's leading shares index slid nearly 1% at the start - taking it below the 5000 mark - but it bounced back shortly afterwards.

Gold continued to hit new record highs, rising to 1,895 US dollars (£1,151) per ounce, because it is seen as a safe haven amid the market turmoil.

Brent crude oil prices fell nearly 2% to 107.6 US dollars (£65.4) a barrel, on speculation that Colonel Muammar Gaddafi's 40-year rule in Libya is on the edge of collapse, which traders think could reopen supplies from the war-torn country.

The CAC 40 in France was up 1% but the DAX in Germany closed down 0.1%. The Dow Jones Industrial Average in the US made gains of 0.5% as the London market closed.

Markets have swung wildly in recent weeks as figures revealed the pace of economic growth in countries such as the US and Germany has slowed, leading to fears that the global recovery is running out of steam.

A report by Morgan Stanley last week added to the jitters when it said the global economy is dangerously close to a recession.

Fears about the strength of the world's biggest economy were heightened by a rise in the number of jobless claimants and weak manufacturing and home sales figures.

There are also unresolved worries about the eurozone debt crisis after French president Nicolas Sarkozy and German chancellor Angela Merkel failed to back eurozone bonds to fix the current problems at an emergency meeting.

Markets are now focused on European manufacturing data, due to be released tomorrow, while a talk by US Federal Reserve chairman Ben Bernanke on Friday will be watched keenly for any indication that a third round of quantitative easing, or money printing, could be on the cards.

Ben Potter, market strategist at IG Markets, warned there could be further volatility in store and said "markets are going to remain at the mercy of fickle sentiment and confidence".

He added: "All eyes are on Fed chairman Bernanke and what he has, if anything, in his basket of tricks to help the global economy."

PA

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...