G20's slowness in boosting euro zone bailout funding drives Footsie lower

FTSE: 5,527.16 (–18.48) Mid-250: 10,387.80 (–18.87) Small Cap: 2,843.25 (+10.99)UK STOCKS fell yesterday, extending this week's first slump in six weeks, as a disagreement on boosting the International Monetary Fund's resources to fight Europe's debt crisis overshadowed a drop in the US jobless rate.

The benchmark FTSE 100 Index lost 18.48, or 0.3 per cent, to 5,527.16 at the close of trading in London, as more than two stocks fell for every one that rose.

The gauge retreated 3.1 per cent this week.

There is a “lack of any concrete detail with respect to additional IMF funding,” said Michael Hewson, a markets analyst at CMC Markets in London.

“The Greece situation continues to remain uncertain with tonight’s vote of confidence likely to result in the stepping down of Greek prime minister Papandreou, which would almost certainly be followed by some form of national-unity government.”

The FTSE 100 has fallen 6.3 per cent this year as Europe’s debt crisis intensified. The UK remains the best performing equity market in western Europe this year, except for Iceland.

The gauge had rallied for five weeks spurred by better than estimated earnings and economic data and growing confidence that the euro area would help Greece avoid default.

G20 leaders meeting in the French resort of Cannes failed to agree on IMF resources, German chancellor Angela Merkel told reporters yesterday. Governments are awaiting further details of the euro area’s week-old rescue package before they commit cash, Ms Merkel said.

Greek prime minister George Papandreou faces a confidence vote in parliament that will determine whether he stays on or calls an election.

In the US, a report showed that the unemployment rate fell to a six-month low of 9 per cent in October from 9.1 per cent in September.

Millennium Copthorne fell 3.2 per cent to 419.3p after chairman Kwek Leng Beng said that the euro area’s sovereign-debt crisis has made the hotel group’s business customers more cautious.

IAG, formed from the merger of British Airways and Iberia, fell 6.8 per cent to 156.9p. The posted third-quarter profit sank 31 per cent from a year earlier.

Lancashire Holdings rose 4.2 per cent to 740p after the insurer said market conditions are improving. – (Bloomberg)