European markets were broadly lower this morning as investor focus shifted from the euphoria of the bailout package to concerns surrounding its sustainability and its failure to address the underlying problems i.e. Greece’s competitiveness and economic growth prospects. The latter was accentuated by the downgrade of Greek government debt from CCC to C (the lowest level above a default), the agency stating that it would consider Greece to have technically defaulted after the bond exchange is complete.
There was also a raft of economic data out of the eurozone that wasn’t overly bullish, with a Services Purchasing Managers Index pointing towards a contraction with a figure of 49.4 this month (down from January’s 50.4 level). Commentators highlighted the potential for the region to slip back into recession.
The FTSE 100 recovered from the lows it hit around midday to finish nearly 12 points, although the 0.2% loss still saw the index close above the 5900 level at 5916. The biggest gainer on the index was Rexham, investors welcoming its 2011 results and analysts commenting that the group has made good progress in cash and return on capital. Shares in the container and packaging company put on 7.4% to finish at 413p. Brent crude made further gains on continued Iranian tensions, closing up 1.9% to $122.7/bbl.