As mining shares fall, hopes of action fade from meeting of European leaders later today

<p>The FTSE 100 Index has opened down 61 points, or around 1.2%, erasing much of yesterday’s gains as mining shares fell and hopes of action […]</p>

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  • The FTSE 100 Index has opened down 61 points, or around 1.2%, erasing much of yesterday’s gains as mining shares fell and hopes of action fades from a meeting of European leaders later today, predominantly regarding the possibility of a jointly guaranteed Eurobond to help lower weak governments’ borrowing costs.
  • On the continent the CAC was down 1.4% at 3041 and the DAX down 1.3% at 6353. The Dow Jones closed at a just over 1.5 points loss at 12502 yesterday, dragged down 57 points in the last 45 minutes by fresh eurozone worries.
  • On the Nasdaq, Facebook has continued its slide, settling at $31 per share, that’s down nearly 18.5% on its initial price.
  • Back in the UK, our biggest loser today is upmarket fashion retailer Burberry which has fallen 5.1% despite reporting an expected 26% increase in profit – investors may be worried by the economic slowdown in emerging markets such as China who’s hitherto growing demand for luxury goods has offset weaker trends in the US and Europe.
  • Banks have also taken a hit, with Barclays leading the losses at 3.7% down as it announced it would be selling off its stake in US asset manager BlackRock at a 2% discount as Basel 3 regulations decrease the profitability of minority stakes in such firms for banks.
  • In terms of macroeconomic news today, we’ve had a better than expected unemployed claimant count change – down 13.7k as opposed to the expected 5.4k. We’ve also got Bank of England governor Mervyn King speaking on the BoE inflation report and later today, new residential building permits in the US. Other than that investors will be watching Hollande and Merkel duke it out to see just how different their views are on the best road to economic recovery in Europe.

See the City Index Economic Calendar and Companies Reporting Dates page for latest economic news and company events that are likely to impact the markets today.

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