U.K. stocks fell for a second day, with the FTSE 100 Index continuing its retreat from a six-month high, amid renewed concern about Europe’s debt crisis and as tensions between Japan and China escalated.
Aviva Plc led a selloff in financial companies as analysts downgraded the insurer’s shares. Royal Bank of Scotland Group and Barclays Plc dropped more than 1.5 percent. BP Plc, Europe’s second-biggest oil company, retreated 2.7 percent as crude dropped for a second day.
The FTSE 100 fell 26.15 points, or 0.4 percent, to 5,867.37 at 3:04 p.m. in London, bringing it’s two-day decline to 0.8 percent. The broader FTSE All-Share Index dropped 0.5 percent today, while Ireland’s ISEQ Index slipped 0.3 percent.
“With tensions getting worse in Asia and uncertainty growing, investors are becoming once again more risk averse,” said Markus Huber, a trader at ETX Capital in London. “It wouldn’t be too much of a surprise if markets are once again tending weaker today with continuing profit taking.”
The FTSE 100 climbed to the highest level since March last week after the European Central Bank pledged an unlimited bond- buying program and the Federal Reserve announced a third-round of quantitative easing to support economic growth.
The volume of shares changing hands on the FTSE 100 was 23 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Elsewhere, thousands of people in China protested outside the Japanese Embassy in Beijing over a territorial dispute in China and Japan’s worst diplomatic crisis since 2005 that threatens a trade relationship worth more than $340 billion.
Tensions over islands, known as Diaoyu in Chinese and Senkaku in Japanese, complicate policy makers’ efforts to fortify growth in Asia’s biggest economies as Europe’s debt crisis saps demand for exports.