London midday: Stocks fall on concerns over Italy and Cyprus

27th Mar 2013 11:52

Worries about Italy and Cyprus weighed heavily on stock markets on Wednesday morning as the Eurozone crisis showed no signs of abating.The political impasse in Italy has continued with centre-left leader Pier Luigi Bersani failing to persuade Silvio Berlusconi's centre-right party to support a minority administration. Instead Berlusconi has maintained his view that the two parties should form a coalition, something which Bersani has ruled out.This continuing uncertainty was reflected in the Italian Treasury's sovereign debt sale this morning, which experienced higher borrowing costs and relatively soft demand. Italy sold €6.91bn in five- and 10-year debt, the top end of its €5-7bn target, but yields on the five-year notes jumped to a six-month high, while the bid-to-cover ratio for each issuance eased from the last auction.Over the Cyprus, markets were still looking for more details on the terms of the bailout, including the size of the levy being imposed on deposits above €100,000. The government is to impose capital controls for a seven-day period to prevent a run on the banks when they re-open tomorrow, according to Finance Minister Michael Sarris.Meanwhile, according to Cyprus News Agency, the head of the Bank of Cyprus has been sacked by the central bank, as ordered by international lenders. Sources said that this was a "necessary action" as part of the restructure of Cyprus' financial sector.Also weighing on markets this morning was the news that UK banks are short of £25bn in capital and must close the 'black hole' by the end of 2013, according to the Financial Policy Committee. Nevertheless, half of the shortfall is thought to already be covered by capital plans this year.FTSE 100: TUI Travel flying high; Prudential drops after fineLeisure travel firm TUI Travel was a high riser after reiterating that full-year underlying operating profits would be at the top of the 7-10% guidance range. The firm hailed a decent winter 2012/2013 season and said that trading momentum going into the summer is "very strong".Leading the downside was insurance firm Prudential after the FSA fined it £30m for the way the group handled its failed bid for AIA.Also lower were BSkyB, Smiths Group, British Land, Prudential and Schroders after going ex-dividend. Mining stocks were in demand this morning following the sector's recent weakness, having lost 9.0% over the last month. ENRC was rebounding slightly after heavy falls the day before after Kazakhmys took a $2.2bn impairment charge after writing down its value of its 26% stake in the fellow miner.Sector peers Rio Tinto, Glencore, Xstrata and Antofagasta were also on the up with the latter lifted by an upgrade by Fox-Davies to 'hold'.Energy services giant Wood Group was higher after receiving a "significant" three-year extension to its North Sea contract with CNR International, topping off an impressive week of contract wins for the firm.FTSE 250: ICAP slumps on full-year guidanceInterdealer broker ICAP said trading conditions in the last nine months have been extremely challenging and it expects full-year revenue to be 13% lower than the previous year, causing shares to tank.Egypt-focused gold producer Centamin fell despite saying that full-year production increased by nearly a third in 2012 while EBITDA jumped 10%.FTSE 100 - RisersTUI Travel (TT.) 319.50p +2.93%Lloyds Banking Group (LLOY) 48.69p +2.18%Weir Group (WEIR) 2,222.00p +1.60%Rio Tinto (RIO) 3,117.00p +1.02%Wood Group (John) (WG.) 865.00p +0.99%Antofagasta (ANTO) 1,031.00p +0.98%Xstrata (XTA) 1,085.00p +0.88%GlaxoSmithKline (GSK) 1,520.50p +0.83%Glencore International (GLEN) 359.75p +0.80%InterContinental Hotels Group (IHG) 1,957.00p +0.57%FTSE 100 - FallersPrudential (PRU) 1,055.00p -3.92%Smiths Group (SMIN) 1,229.00p -3.08%Aviva (AV.) 296.00p -2.54%Vodafone Group (VOD) 183.25p -2.40%Schroders (SDR) 2,082.00p -2.25%BT Group (BT.A) 271.50p -2.20%British Sky Broadcasting Group (BSY) 870.00p -2.19%Standard Life (SL.) 360.70p -2.01%International Consolidated Airlines Group SA (CDI) (IAG) 250.80p -1.99%Polymetal International (POLY) 864.00p -1.93%FTSE 250 - RisersOcado Group (OCDO) 160.30p +3.42%Bumi (BUMI) 321.70p +3.24%Domino's Pizza Group (DOM) 598.00p +1.87%Kazakhmys (KAZ) 412.80p +1.85%Dixons Retail (DXNS) 33.46p +1.39%Ferrexpo (FXPO) 175.30p +1.39%African Barrick Gold (ABG) 206.00p +1.28%BH Global Ltd. GBP Shares (BHGG) 1,221.00p +1.24%Brewin Dolphin Holdings (BRW) 211.00p +1.15%United Drug (UDG) 267.90p +1.09%FTSE 250 - FallersICAP (IAP) 300.30p -6.91%Hochschild Mining (HOC) 282.40p -5.23%Centamin (DI) (CEY) 53.90p -4.18%Cranswick (CWK) 975.00p -4.13%Carpetright (CPR) 625.00p -3.55%Carillion (CLLN) 276.40p -3.15%Bwin.party Digital Entertainment (BPTY) 142.70p -3.12%Supergroup (SGP) 594.00p -2.86%Hiscox Ltd. (HSX) 542.50p -2.78%Bovis Homes Group (BVS) 730.50p -2.73%BC