London close: Greek default fears grip markets as UK stocks pull back from record

Stocks finished lower on Thursday with UK markets retreating from a record high, as bonds yields in Athens soared on the back of concerns over a potential Greek default.

London's FTSE 100 was down 36.33 points (-0.51%) by the close at 7,060.45.

The index pulled back from Wednesday's all-time closing high of 7,096.78; it also set a record intraday high of 7,111.72 during the previous session.

Sentiment was hammered by reports that Athens made an informal approach to the International Monetary Fund about delaying loan repayments, only to be told that rescheduling was not possible. The IMF is owed nearly €1bn in two payments due in May.

"Neither the desperation from Greece in asking for an extension, nor the hard-line approach from the IMF in denying it bode well for a resolution," said CMC Markets analyst Jasper Lawler.

Meanwhile, German finance minster Wolfgang Schäuble said that an agreement between Greece and its international creditors is unlikely to be reached at the next Eurogroup meeting on 24 April. Also playing on investors' minds were reports that an advisor to the Greek government had reportedly suggested that the government may hold a referendum.

The impact was clearly being felt on the bond market, with yields on Greek two-year notes rising nearly four percentage points on the day to a record high of 27.9%. The yield on the benchmark 10-year bond rose over one percentage point to a two-year high of 12.9%.

Ex-div stocks, Telecom Plus and Petra fall

Footsie constituents BAE Systems, Hikma Pharmaceuticals, Capita, Intu Properties, Smith & Nephew and Reckitt Benckiser were all trading with heavy losses after going ex-dividend.

UBS was providing further downwards pressure on aerospace and defence group BAE after cutting the stock from 'buy' to 'neutral', saying "we do not believe there is sufficient upside potential to maintain the 'buy' rating".

On the 250 Telecom Plus shares plummeted nearly 20% after the group warned that profit growth for 2015 and 2016 will be well below market expectations as the Utility Warehouse owner unexpectedly wrote down a large amount of unbilled customer debt.

Petra Diamonds plunged 11% as the diamond mining group said its annual results are expected to fall below market forecasts due to poorer diamond grades it found at its Cullinanin mine in South Africa.

Consumer goods colossus Unilever jumped after enjoying a strong start to 2015 with underlying sales for the first quarter ahead of analysts' estimates.

Miller Lite and Grolsch maker SABMiller also rose as strong growth in Africa and Latin America helped to accelerate net producer revenue growth in the fourth quarter. Sector peer Diageo, however, fell as organic sales declined in the third quarter, surprising the market which had pencilled in an increase.

UK housebuilder Persimmon was unwanted after saying that despite an "encouraging start" to 2015, political uncertainty ahead of the elections meant it is increasingly difficult to secure planning consents for sites in the land market.

Supermarket group Morrisons dropped into the red after saying it will recruit 5,000 new staff in-store and start consultations to simplify the head office by cutting 720 roles. Meanwhile, Sainsbury's slipped on reports the retailer is planning to convert some 1.5m square foot of food space to non-food.

Market Movers
techMARK 3,221.04 -0.93%
FTSE 100 7,060.45 -0.51%
FTSE 250 17,730.27 -0.80%

FTSE 100 - Risers
Unilever (ULVR) 3,011.00p +2.62%
Aggreko (AGK) 1,621.00p +1.95%
Randgold Resources Ltd. (RRS) 5,080.00p +1.91%
Royal Dutch Shell 'A' (RDSA) 2,109.00p +1.81%
GKN (GKN) 370.60p +1.79%
Old Mutual (OML) 240.30p +1.78%
SABMiller (SAB) 3,636.00p +1.42%
British American Tobacco (BATS) 3,742.00p +1.38%
Glencore (GLEN) 302.10p +1.07%
Royal Dutch Shell 'B' (RDSB) 2,144.50p +1.06%

FTSE 100 - Fallers
Pearson (PSON) 1,370.00p -3.99%
Diageo (DGE) 1,896.50p -3.58%
Meggitt (MGGT) 546.50p -3.10%
BAE Systems (BA.) 516.00p -3.10%
Intu Properties (INTU) 353.20p -2.89%
Barratt Developments (BDEV) 529.50p -2.49%
Rio Tinto (RIO) 2,842.00p -2.40%
Sainsbury (J) (SBRY) 277.90p -2.39%
Tesco (TSCO) 241.05p -2.37%
Smith & Nephew (SN.) 1,146.00p -2.22%

FTSE 250 - Risers
Debenhams (DEB) 84.90p +6.66%
JD Sports Fashion (JD.) 562.50p +4.36%
NMC Health (NMC) 726.00p +2.91%
Infinis Energy (INFI) 190.00p +2.65%
Vedanta Resources (VED) 574.00p +1.95%
Brown (N.) Group (BWNG) 329.80p +1.63%
Poundland Group (PLND) 341.00p +1.46%
Imagination Technologies Group (IMG) 206.00p +1.43%
Redefine International (RDI) 57.80p +1.23%
FirstGroup (FGP) 103.00p +1.08%

FTSE 250 - Fallers
Telecom Plus (TEP) 785.00p -19.73%
Petra Diamonds Ltd.(DI) (PDL) 165.00p -10.47%
Amlin (AML) 483.80p -8.72%
Petrofac Ltd. (PFC) 1,024.00p -3.85%
Ophir Energy (OPHR) 160.30p -3.38%
Soco International (SIA) 182.60p -3.28%
Bovis Homes Group (BVS) 963.50p -3.12%
Grafton Group Units (GFTU) 808.00p -2.94%
Countrywide (CWD) 526.00p -2.86%
Clarkson (CKN) 2,210.00p -2.86%