London shares slipped lower on Friday as the eurozone approved the Cyprus bailout and extended repayment terms for Ireland and Portugal by seven years, with US banking results failing to turn around sentiment.
The FTSE 100 index of leading companies shed 0.49 percent to 6,384.39 points.
Eurozone finance ministers formally approved the terms of a Cyprus debt bailout at a meeting in Dublin Friday, after some confusion over whether it needed revision, saying it could now go ahead once cleared by national parliaments.
But that failed to impress the markets.
“Anyone who thinks that the approval of the Cyprus bailout will be the end of things is living in a parallel universe,” said CMC Markets analyst Michael Hewson.
With the bailout decimating its revenue-generating financial sector there is little prospect to balance the economy, he noted, and stuck within the eurozone Cyprus can’t devalue to become competitive in tourism with nearby Turkey.
“Cyprus will be an ongoing sore for European leaders for some time to come,” concluded Hewson.
Aside from the eurozone, investors were also poring over the latest earnings in the United States where JP Morgan Chase and Wells Fargo kicked off the corporate earnings season for the major banks.
JPMorgan reported a 33 percent increase in quarterly earnings while Wells Fargo also reported a 22 percent quarterly upturn compared with last year, as credit quality continued to increase with the improving housing market.
In London, British chemical company Johnson Matthey was the best blue chip performer, adding 2.72 percent to end at 241.5, followed by power generator rental firm Aggreko, which addded 1.76 percent to 1,792.
Miner Randgold Resources was the day’s worst performer, slipping 4.56 percent to 4,958, followed by chemicals maker Croda International which shed 3.91 percent to end at 2,608.
Lloyds Banking Group was the most traded stock, seeing 106.43 million units change hands, followed by Vodafone which saw 55.58 million shares switch owners.
On the currency markets sterling dipped slightly to $1.5359 at 5:25 pm (1635 GMT) from $1.5396 at the same time on Thursday, while it stayed almost flat against the euro, reaching 1.1731 from 1.1733 euros over the same period.
FTSE shares slip despite Cyprus bailout deal
