LONDON, March 18 Britain's FTSE 100 tumbled
lower early on Monday after Cyprus planned to impose a shock tax
on their investors to prevent a collapse of the financial
system, heightening fears of contagion in the euro zone with
exposed banks the heaviest fallers.
By 0803 GMT, the FTSE 100 was down 93.03 points, or
1.4 percent, at 6,396.62.
In a radical departure from previous aid packages, euro zone
finance ministers want Cyprus savers to forfeit a portion of
deposits in return for a 10 billion euro ($13 billion)
Bank, large holders of deposits within the euro
zone, fell 1.7 percent on concerns over their exposure to any
turmoil and knock-on effect within.
"Banks clearly will be hit by this news, which will provide
an opportunity for investors looking to build a position," Guy
Foster, portfolio strategist at Brewin Dolphin, said.
He said the specifics of Cyprus's situation, in terms of the
outsized nature of its deposits and the make-up of some of the
larger depositors, is not repeated across the euro zone, so
confidence in bank deposits on other peripheral European
regions, therefore, ought to hold firm.
"In general, however, we remain cautious on the medium term
story for Europe. We expect economic data and political
infighting to weigh on European markets all summer," Foster
(Reporting by David Brett)