RAMSEY CROOKALL

11th July

Evening Report

The FTSE 100 closed 0.1% lower amid growing concern that Italy may succumb to debt contagion and fears the crisis is being mismanaged. British Sky Broadcasting was the biggest faller on the index, down 5.3%, amid doubts over whether the News Corp deal will go through. Banking stocks were hit the hardest on worries over Italy's finances.

Investors look cautiously to the EU-wide stress test results at the end of the week. BSkyB dropped by 6.5% and was the top loser on the blue chip index as the potential takeover by Rupert Murdoch’s News Corp hangs in the balance. The UK government said t was preparing to ask telecoms regulator Ofcom for additional advice.

The Australian government’s proposal on climate change stoked International Power’s share price as the electricity-generating company said the plan is expected to be cash flow positive and earnings neutral in the first five years.

Mining giant Rio Tinto, however, fell lower after voicing its disappointment over Australia's carbon tax proposal of A$23 a tonne on the 500 heaviest emitters as of 1 July 2012, joining the sector's warning that the plan would hinder investment and jobs growth in the nation's mining industry. Sector peer Xstrata was also in the red after slamming the scheme, saying that it is disappointed at the government's "lack of genuine consultation".

Banking peers Royal Bank of Scotland, Lloyds and Barclays were also unwanted. As well as insurers Aviva, Admiral and Legal & General were also under the weather.

THE FTSE 100  closed Down 60 @ 5930                                  THE DOW JONES at 4:50           Down           145      @    12511                                 NASDAQ COMP at 4:50             Down           47       @    2812                                            Exchange Rates GBP – USD           1.5927 GBP - EURO         1.1345