Worries about sovereign debt are dominating early sentiment, helping push leading shares sharply lower.
Ahead of the final second quarter UK GDP figures due shortly - with little change to the 1.2% quarterly growth rate expected - the FTSE 100 has fallen 60.05 points to 5513.37.
Yesterday's downgrade of Anglo Irish Bank's debt by credit rating agency Moody's unsettled the markets, coming as it does ahead of this week's announcement by the Irish government about the cost of the bail out. Today rival ratings agency Standard & Poor's said it may cut Ireland's credit rating due to the Anglo Irish situation. A deadline for European banks to repay European Central Bank loans is also looming. On top of that, came chatter that Moody's may be close to downgrading Spain's debt, adding that country once more to the list of worries, alongside Ireland and Portugal. Later today come US consumer confidence figures, which will be keenly watched for the latest signs of how the US economy is performing. Manoj Ladwa at ETX Capital said:
With renewed concerns over the debt situation in Spain and Ireland, a lack of conviction buying in equities and gold spiking at $1300 in recent days, traders are wary about being long at current levels.
On a busy day for corporate news hedge fund group Man is the biggest faller, down 5.1p to 214.2p after it revealed clients had withdrawn assets for the eighth quarter in a row, offsetting a strong performance from its key AHL fund. Six month profits fell from $268m to $215m.
Tui Travel is down 4.5p to 216.7p following disappointing results from rival Thomas Cook, off 8p at 175.3p.
Software group Sage is bucking the trend, up 5.9p to 272.2p after yesterday's gossip about a possible takeover.
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