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Tue City brief: Greece fears and US rates spook traders

The FTSE100 plunged 173.63 points or 2.5% to close at 6,702.84, a seven week low, and well off its recent peak.

Shares fell as worries over Greece resurfaced and the dollar soared on speculation that the Federal Reserve will raise interest rates.

The leading index has fallen for the last three sessions since reaching a new record closing high of 6,961.14 last week and now stands at a level not seen 20 January when it settled at 6,620.10.

There were also worries about a slowdown in China  which has done nothing to foster confidence in commodities. BG GroupTullow Oil, Shell and BP were among the fallers. Brent crude was down 3.4% at $56.53 a barrel ahead of data which is forecast to show that US oil inventories rose for the ninth week in a row.

Insurer Prudential fell after confirming speculation that Credit Suisse has poached its boss Tidjane Thiam to replace its long-standing chief executive Brady Dougan. Prudential also released final results showing operating profits growth slowed to 14% from 17% at the half-year stage.

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