London midday: Euro concerns dampen sentiment, Burberry falls

Just six stocks were in the blue by midday, as reports of political difficulties for the Italy's Prime Minister-in-waiting shook investors' nerves. London's blue chip index remains firmly in negative territory, registering a fall of 1.35% by 12:05.ITALIAN, SPANISH YIELDS ON THE RISEFormer EU Competition Commissioner Mario Monti may have run into political resistance on forming a Cabinet in Italy, according to Bloomberg. The news agency describes him as struggling yesterday to get political parties to agree to take part in his so-called technical Cabinet.The news may be a reason why the closely-watched yield on a 10-year Italian government bond has surged back towards the 7%, a level seen by most as dangerous and unsustainable. By 12:05 in London, the borrowing rate was 33 basis points higher at 7.03%. Global stock markets were rattled last Wednesday when the yield broker through the 7% barrier, hitting an intraday high of 7.45%.Meanwhile, the Spanish Treasury issued a total of €3.158bn in short-term debt, with yields coming in significantly higher than the last auction. The Treasury issued both 12-month and 18-month debt at yields of 5.2% and 5.32%, respectively, up from 3.61% and 3.8% previously. UK INFLATION COMES IN BELOW EXPECTATIONSIn domestic news, CPI, the government's preferred measure of inflation, stood at 5% in October 2011, down from 5.2% in September - a bigger fall than expected. Some experts are now predicting the Bank of England's long-held belief that inflation would soon start a prolonged fall could now materialise. The Office for National Statistics said the overall slowing in price rises came from falls in the cost of food, air fares and petrol. There had been "significant and widespread discounting by supermarkets and good harvests for certain produce', the ONS said. BURBERRY DISAPPOINTS, C&W WORLDWIDE PLUMMETSLuxury fashion firm Burberry was the heaviest faller despite reports a 29% growth in revenue to £830m, while adjusted pre-tax profit rose 26% to £162m. Despite the market's cool reaction to Burberry's figures, Nomura upped its full-year numbers saying it sees "significant growth potential ahead". On the FTSE 250, the announcement of a new chief executive at embattled telecoms firm Cable & Wireless Worldwide wasn't enough to stop shares plunging as it announced a big fall in profits. The company posted pre-tax profits of £35m in the first half, down from £64m in 2010. The company also announced that while an interim dividend would be paid, future payouts would be suspended to improve the strength of the balance sheet. Shares were down over 13% by lunchtime.Another big mover was Europa Oil & Gas which lost over a quarter of its market value after revealing that drilling at its Horodnic-1 exploration well in northern Romania has been a failure. It says of the operation, which cost Europa £720,000, that "no potentially commercial hydrocarbon bearing interval was found." The banks were also out of favour on Tuesday, with RBS, Barclays and Lloyds registering steep falls.BCFTSE 100 - RisersBritish Sky Broadcasting Group (BSY) 749.00p +0.81%Smith & Nephew (SN.) 576.00p +0.61%Smiths Group (SMIN) 958.50p +0.42%Severn Trent (SVT) 1,586.00p +0.19%Capita Group (CPI) 663.00p +0.15%Marks & Spencer Group (MKS) 331.30p +0.12%FTSE 100 - FallersBurberry Group (BRBY) 1,345.00p -5.35%Essar Energy (ESSR) 275.10p -4.15%Barclays (BARC) 167.65p -3.68%Royal Bank of Scotland Group (RBS) 21.14p -3.65%Vedanta Resources (VED) 1,080.00p -3.57%Lloyds Banking Group (LLOY) 27.46p -3.22%Xstrata (XTA) 979.60p -3.20%Glencore International (GLEN) 415.65p -3.00%Antofagasta (ANTO) 1,142.00p -2.81%Prudential (PRU) 606.50p -2.80%FTSE 250 - RisersOxford Instruments (OXIG) 915.50p +8.66%Micro Focus International Plc (MCRO) 362.10p +3.72%Drax Group (DRX) 570.00p +2.89%Supergroup (SGP) 675.00p +2.43%Exillon Energy (EXI) 305.40p +2.35%Elementis (ELM) 142.40p +2.08%Provident Financial (PFG) 1,038.00p +1.76%BH Macro Ltd. EUR Shares (BHME) € 20.23 +1.40%Anglo Pacific Group (APF) 282.00p +1.33%Synergy Health (SYR) 858.00p +1.00%FTSE 250 - FallersCable & Wireless Worldwide (CW.) 26.15p -13.41%Premier Foods (PFD) 5.20p -9.41%Thomas Cook Group (TCG) 42.29p -6.50%London Stock Exchange Group (LSE) 815.50p -5.56%Talvivaara Mining Company (TALV) 194.30p -5.45%Aveva Group (AVV) 1,540.00p -5.06%SIG (SHI) 88.40p -4.59%Dixons Retail (DXNS) 11.43p -4.11%Misys (MSY) 281.10p -3.60%Kenmare Resources (KMR) 38.09p -3.55%