Global recovery fears keep FTSE in negative territory

The hangover from Friday's disappointing US jobs figures sent Asian markets down almost 4 per cent and dragged the Footsie down from the start, alongside growing concerns over the Hungarian economy.

The blue-chip index recovered from its worst lows but finished 56.94 points off at 5069.06 with a volatile start to trading in the US doing little for confidence late in the session.

Asian markets shuddered at the closely-watched US jobs figures, with Japan's Nikkei 225 down almost 4 per cent and the Hang Seng off 2 per cent in Hong Kong.

On Friday, indexes slumped more than 3 per cent after the US May payroll report came in far weaker than expected and on worries over the sovereign debt crisis in some European countries.

"You would normally see a bounce following a sell-off like we saw on Friday, but the lack of any real direction today shows the market remains unconvinced that all the issues have been worked out," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Virginia.

Signals from Hungarian officials before the weekend that the nation was at risk of a Greek-style fiscal crisis were again poor for sentiment with corporate and economic news thin on the ground.

The country is a European Union member but does not use the euro.

The single currency hit a new four-year low against the dollar over the weekend. It also lost further ground against the pound, which is trading at nearly 1.22 – its highest level since November 2008. Sterling traded at around 1.45 against the dollar.

Oil prices have, meanwhile, slumped to near 70 dollars a barrel as the jobs data raised fresh doubts about the sustainability of the global recovery.

This put pressure on Royal Dutch Shell, which slipped 24p to 1716p.

BP was also in the red, down 3p at 4301/4p, after a Goldman Sachs downgrade saw it lose earlier gains of almost 3 per cent.

The group had been enjoying much-needed gains after reporting some progress in its efforts to stem the Gulf of Mexico oil spill, although the Goldman blow saw the stock resuming its descent.

BP said its latest attempt to control the leak captured 16,600 barrels of oil in its first three days of operation. The update came as BP said the cost of clean-up and containment efforts has reached more than 1.6 billion dollars (1.1bn) so far.

The renewed double-dip recession fears meant mining stocks dominated the fallers' board, with Kazakhmys sliding 45p to 1074p and Xstrata down 321/4p to stand at 919p.

Elsewhere, continued boardroom uncertainty cast a shadow over strong trading figures from insurer Prudential.

In an update ahead of its annual meeting, the Pru said growth accelerated in April and May and led to a 27 per cent rise in sales to 1.35bn for the first five months of the year.

Shares were 22p lower at 534p as investors continued to speculate about potential management changes following the group's failure to complete its multi-billion acquisition of AIG's AIA division.

The biggest Footsie risers were ARM Holdings up 81/4p to 2723/4p, G4S ahead 5p to 2661/2p, Aggreko up 24p to 1354p and Randgold Resources ahead 55p to 5955p.

The biggest Footsie fallers of the day were Kazakhmys, Prudential, Xstrata and Lonmin declining 51p to stand at 1543p.