Greater London, England -- (SBWIRE) -- 11/01/2010 -- Giles Watts, Head of Equities, City Index (http://www.cityindex.co.uk) commented:

“Positive consumer confidence numbers from across the water failed to combat fall in banks and miners as European Bourse headed to the close down 1%.

Weaker financial and commodity stocks weighed on the London index as the nervous atmosphere continued from yesterday. Banks dragged the index lower, following the pattern of yesterday with concern over capital adequacy issues remaining whilst sentiment was further exacerbated by UBS’s reported loss at their investment arm.

The UK mining sector contributed 15 points to the market decline as investors sought to take profits in a sector that has risen aggressively since the end of the summer, concerns over the global recovery and subsequent demand saw clients happy to reduce positions in times of uncertainty.

Cairn Energy was today’s worst performer after its disappointing update on drilling wells in Greenland hit the share price hard, driving the stock down 30p. Arm holdings also suffered a 6% fall, despite posting seemingly solid numbers; much of the fall was attributed to tenuous bid rumours dissipating, with focus now shifting to other players in the sector; after doubling in price over the calendar year, one can understand investors taking some profit in uncertain times.

Striking a more positive note were investors in cruise company Carnival after an upgrade in rating from Barclays Capital. The bank cited a likely uplift from a shift away from the Caribbean into Europe focused cruises and this was enough to drive the stock up 4%.

Clients also sought solace amid the gloom in publisher Pearson as news emerged that the publishing giant is looking to refinance its revolving credit facility, a swift resolution to the issue should see further consolidation as the stock added 2%.

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