London shares open lower in wake of Wall Street

May 17, 2011 | 15:45

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Shares opened lower in London on Tuesday as agreements on new loans for Portugal and Ireland failed to inspire European markets.

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The benchmark FTSE 100 index was down 29.29 points or 0.50 per cent lower at 5,894.20 points at 08:19 am.

Policymakers continued their debate on how to rescue debt-swamped eurozone economies, as International Monetary Fund chief Dominique Strauss-Kahn was refused bail by a New York court after denying sexual assault charges.

The IMF executive board met late Monday to discuss Strauss-Kahn's situation, but made no public announcement on his fate at the helm of the US-based lender.

Meanwhile the Fund signed off on a 78-billion-euro ($111 billion) EU-IMF bailout for Portugal, and approved 1.58 billion euros in new assistance to debt-laden Ireland.

Portugal, under pressure from the markets for months, finally sought a bailout in April after the minority socialist government and right-wing opposition failed to agree on a new round of budget cuts.

On Monday slumping tech stocks pulled US markets down as the country struck its limit on borrowing with no increase in sight, putting more pressure on the government to slash spending.

Vodafone shares jumped 1.87 per cent to 171.40 pence after the the telecoms giant predicted a surge in profits to 11.0-11.8 billion pounds in its current financial year.

The engineering sector was out of favour, with IMI shedding 3.36 per cent to 1,036 pence and Invensys easing 2.32 per cent to 312 pence. Microchip specialist Arm Holdings fell 2.28 per cent to 567 pence.

AFP

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