London shares slumped again on Thursday after ECB chief Mario Draghi said there were risks to eurozone economic growth and as investors kept a close watch over escalating tensions on the Korean peninsula.
The benchmark FTSE 100 index of leading companies fell 1.19 percent to 6,344.12 points, despite improved services sector data that raised hopes of Britain avoiding a third recession in five years according to analysts.
The widely-tracked index had lost 1.08 percent on Wednesday.
In Frankfurt, the head of the European Central Bank told a press conference that “weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of this year, subject to downside risks.”
He spoke after the ECB held its key interest rates steady at 0.75 percent for the ninth month in a row, and after the Bank of England kept its main rate on hold at a record low of 0.50 percent while refraining from pumping more cash into the British economy.
In London, Vedanta Resources was the best blue chip performer, up 6.05 percent to 1,070, followed by fellow miner Eurasian Natural Resources, which added 4.72 percent to 235.2.
Randgold Resources was the day’s biggest faller, slipping 4 percent to 5,160, followed by British microprocessor designer Arm Holdings, which fell 3.98 percent to 879.
Lloyds Banking Group (LBG) was the most traded stock, seeing 121 million shares switch owners, followed by Barclays, which saw 82 million units change hands.
On the currency markets sterling rose against the dollar to $1.5187 at 5.12 pm, up from $1.5136 at 5:31 pm on Wednesday, and also strengthened slightly against the euro to 1.1818 euros from 1.1790 euros over the same period.
In Asia, attention was focused on the Korean peninsula, where tension has risen to a high level amid a standoff that pits North Korea against South Korea and its main ally, the United States and on policy moves by the Bank of Japan.
Tokyo shares bounced and the yen tumbled after the BoJ unveiled a fresh raft of monetary easing measures, while its new leader promised to do what was needed to revive the stuttering economy.
London shares slump again on ECB warning
