London shares weaken on energy price cap worries

Brokers monitor market movements at the BGC Partners firm in London on August 5, 2011 (AFP)

London (AFP) – London shares closed lower on Wednesday weighed down by concerns that rising UK energy prices could lead to government intervention in the market.

The FTSE 100 fell 0.29 percent to end at 6,552.35 points.

Shares in British utilities firms dropped sharply earlier in the day after Labour leader Ed Miliband said he would cap household energy prices if elected in 2015.

Growing concerns over US budget discussions also weighed on European indices.

In London, Vodafone was the most traded blue-chip by volume with 167 million units switching owners, followed by Lloyds Banking Group which saw 126 million units change hands.

The day's best performers on the FTSE were silver producer Fresnillo, which rose 3.60 per cent to 1006 pence, and building firm Travis Perkins which gained 2.71 percent to 1669.0 pence.

Meanwhile, the day's biggest loser was cruise ship operator Carnival, which slipped 7.09 percent to 2,106 pence after several brokers downgraded its shares. It was followed by energy firm SSE which sank 5.95 percent to close at 1,491 pence.

On the currency markets, sterling rose to $1.6078 at 5:00 pm from $1.6012 at around the same time on Tuesday and also firmed a little to 1.1880 euros from 1.1867 over the same period.