London's blue chip index had fallen close to its lowest levels of the day by lunchtime ahead of the EU summit in Brussels. Meanwhile, markets were still digesting the downgrade of five Eurozone nations on Friday and the talks between the Greek government and private creditors that are still ongoing.

Fitch announced late on Friday to downgrade the ratings of five Eurozone nations - Italy, Spain, Belgium, Cyprus and Slovenia. "The Eurozone crisis will only be resolved as and when there is broad economic recovery," Fitch said. Barclays Capital analyst Guiseppe Maraffino said he expects a limited market reaction to the action as both the timing and size of the downgrades were expected.

In Greece, the government and the Institute of International Finance (IIF) are thought to be "close" to reaching an agreement. Greek Finance Minister Evangelos Venizelos declared yesterday that a final debt-swap pact will be concluded this week. Greece needs to reach an agreement with its bondholders as one of the prerequisites to receiving a second bailout package from the International Monetary Fund, European Central Bank and the European Union worth €130bn.

Meanwhile European leaders prepare to meet up in Brussels this afternoon for the EU summit. While they are expected to focus on the fiscal compact and the European Stability Mechanism (ESM), leaders will undoubtedly be sidetracked by the current situation in Greece.

Elsewhere in the Eurozone, French President Nicolas Sarkozy has moved ahead on his promise and stated that his country will implement a 0.1% tax on financial transactions starting in August.

BANKS, MINERS LEAD THE DECLINE

The banks were in the red as the euro crisis drags on, with Lloyds, Standard Chartered and Royal Bank of Scotland (RBS) among the worst performers. RBS continued to make the headlines on Monday morning after its Chief Executive Stephen Hester appears to have bowed in to public and political pressure and declined his bonus share award worth £963,000.

Meanwhile, Lloyds is rumoured to be shaking up its management structure, according to Reuters. The news agency cited a source saying that an announcement should be made in the next week or so.

Defensive stocks were in demand, with utilities National Grid, International Power and Centrica among the highest risers. British Gas owner Centrica announced this morning that it would pay ConocoPhillips $223m for its non-operated interests in the gas- and oil-producting Stratfjord field (and associated satellites) in the North Sea.

Miners were tracking metals prices lower, with Evraz, Vedanta Resources, Glencore and Antofagasta registering steep losses. Even Rio Tinto was falling despite an upgrade by Goldman Sachs from neutral to buy.

In other ratings changes: Whitbread was out of favour after Credit Suisse cut its rating from outperform to neutral; Premier Oil was pressured lower by a UBS downgrade from buy to neutral; meanwhile, London Stock Exchange nudged higher after both Credit Suisse and UBS raised their target prices for the stock.

Chip designer ARM Holdings was among the few risers after Nomura raised its target price on the stock. While the broker maintained its neutral rating, it said that in the long-term, it remains encouraged by the opportunities arising from notebooks and servers.

FTSE 250: CRANSWICK SEES STRONG THIRD QUARTER GROWTH

Meats and 'foods-to-go' producer Cranswick saw sales growth accelerate to 10% in the third quarter ended December 31st, from just 3% in the first half. The good performance was helped by a particularly strong quarter for bacon and fresh pork products as well as positive contribution from all other categories, the firm said. Export sales were "buoyant" and pastry products sales showed "pleasing progress".

Healthcare firm BTG rose after successfully completing the first phase of the US-based trial of Varisolve, a varicose vein treatment. Casinos group Rank was also higher after confirming speculation that it is in talks with Gala Coral about the potential acquisition of Gala's casino business.

Outsourcing and energy services company Mitie fell despite saying that revenues and earnings had come in in line with expectations from October 1st 2011 to date.

Egypt-focused gold miner Centamin followed the sector lower despite achieving a record quarter of gold production in the last three months of the financial year, helped by higher output at its flagship Sukari mine and lower operating costs.

Insurance underwriter Lancashire Holdings was also lower as it said that it has increased its estimated losses resulting from the floods in Thailand and the Tohoku earthquake in Japan.

BC

FTSE 100 - Risers
GlaxoSmithKline (GSK) 1,436.50p +1.13%
International Power (IPR) 332.30p +0.70%
ARM Holdings (ARM) 599.50p +0.59%
Centrica (CNA) 293.80p +0.55%
National Grid (NG.) 613.50p +0.49%
Hargreaves Lansdown (HL.) 417.30p +0.48%
Vodafone Group (VOD) 172.95p +0.41%
AstraZeneca (AZN) 3,047.50p +0.38%
Hammerson (HMSO) 390.30p +0.36%
United Utilities Group (UU.) 603.50p +0.33%

FTSE 100 - Fallers
Evraz (EVR) 438.00p -4.78%
Lloyds Banking Group (LLOY) 31.18p -3.84%
Essar Energy (ESSR) 130.00p -3.27%
Vedanta Resources (VED) 1,190.00p -2.94%
Aviva (AV.) 345.70p -2.92%
Antofagasta (ANTO) 1,312.00p -2.67%
Schroders (SDR) 1,481.00p -2.63%
Standard Chartered (STAN) 1,551.00p -2.33%
Royal Bank of Scotland Group (RBS) 27.11p -2.27%
Eurasian Natural Resources Corp. (ENRC) 712.00p -2.26%

FTSE 250 - Risers
Dixons Retail (DXNS) 15.80p +5.33%
Supergroup (SGP) 651.50p +3.17%
Cranswick (CWK) 781.50p +2.96%
Galliford Try (GFRD) 482.90p +2.74%
BTG (BGC) 330.00p +1.95%
Dignity (DTY) 809.50p +1.63%
BH Global Ltd. GBP Shares (BHGG) 1,150.00p +1.32%
Computacenter (CCC) 391.10p +1.32%
Rank Group (RNK) 128.60p +1.26%
AG Barr (BAG) 1,244.00p +1.14%

FTSE 250 - Fallers
Aquarius Platinum Ltd. (AQP) 179.70p -6.41%
Allied Gold Mining (ALD) 138.00p -4.83%
Lonmin (LMI) 1,050.00p -3.85%
International Personal Finance (IPF) 191.00p -3.54%
Cape (CIU) 371.90p -3.15%
Afren (AFR) 120.20p -3.06%
Fenner (FENR) 441.50p -2.97%
Kenmare Resources (KMR) 46.45p -2.72%
Carillion (CLLN) 312.70p -2.68%
Amlin (AML) 348.20p -2.57%

Related share prices
Centrica (CNA) share price
Lloyds Banking Group (LLOY) share price
Royal Bank of Scotland Group (RBS) share price
Rio Tinto (RIO) share price
Standard Chartered (STAN) share price
Whitbread (WTB) share price
ARM Holdings (ARM) share price
Antofagasta (ANTO) share price
BTG (BGC) share price
Cranswick (CWK) share price
Mitie Group (MTO) share price
Premier Oil (PMO) share price
International Power (IPR) share price
London Stock Exchange Group (LSE) share price
Centamin (DI) (CEY) share price
National Grid (NG.) share price
Vedanta Resources (VED) share price
Lancashire Holdings (LRE) share price
Glencore International (GLEN) share price
Evraz (EVR) share price