Weakness in banking stocks dragged Britain's top share index lower after Ireland put a price on the bailout of Anglo Irish Bank and Spain's credit rating was downgraded by Moody’s to Aa1.
The FTSE 100 index was trading 11.18 points lower which accounts for 0.2 percent, at 5,558.09 after its 0.2% fall at close to 5,569.27 on Wednesday.
This ended a strong month and quarter which was not at all expected by analysts in a dull fashion. The UK benchmark has moved 6.3 percent up so far in the month of September.
Oil prices went below $81 per barrel due to weakness in European Stock Markets. Benchmark oil for November delivery was trading at $80.96 a barrel, 62 cents lower. The contract gained $1.61 to settle at $81.58 on Friday, the first time it topped $80 a barrel since early August. Oil held most of its gains on Friday during the hours of trade in Asia but started weakening as soon as the European stock markets began declining. Many times, oil traders take cues from stock market with an objective to take indications about investor confidence in the market.
Equities in the European markets have started the fourth quarter of the year firmly in the negative zone with markets plunging yesterday for the sixth consecutive trading session which is the longest continuous downside since January 2009. Fears about the US going into a double-dip recession have outweighed positive economic data in Europe and has beaten the expectations for third quarter earnings. As a result of this, European markets have ignored fresh upbeat economic indicators in Europe and are staying decidedly bearish about the prospects for Eurozone equity indices heading into the final three months of 2010.
