The London market continued to come under pressure today after a credit rating agency hit Germany with a negative outlook and added to ongoing fears over the future of the eurozone.
The FTSE 100 Index was 10 points lower at 5523 after a pounding yesterday when it fell 2%, wiping £30 billion from its value amid concerns over Spain and Greece.
Moody’s last night lowered its outlook on Germany’s credit rating to negative from stable, denting faith in Europe’s strongest economy.
The move came after a turbulent day for the single currency bloc, which saw the yield on 10-year Spanish bond hit euro-era highs of 7.5% as it became increasingly likely that the country would need an EU bailout.
Banking stocks suffered amid the ongoing weak sentiment and following reports that they would reveal additional charges for mis-selling payment protection insurance (PPI).
Royal Bank of Scotland was 2% or 4.3p lower at 193.5p, Barclays slipped 2.3p to 150.3p and Lloyds Banking Group dropped 0.4p to 28.9p.
Outside the top flight, Carpetright fell 2% or 11p to 604p despite revealing an encouraging update which showed growth in UK like-for-like sales of 1.7% for the 12 weeks to July 21.