Failure to reach Greek debt deal pulls FTSE down - London Report

GREECE’S latest failure to reach a deal with its creditors helped to push the FTSE 100 down yesterday, with the blue-chip index closing down 1.1 per cent at 6,710.52.

The reduction extended the previous session’s losses of 0.9 per cent, but slightly outperformed major Eurozone indexes.

Talks on ending a deadlock between Greece and its creditors broke up in failure on Sunday, with European leaders venting their frustration as Athens stumbled closer towards a debt default that threatens its future in the euro.

European Union officials blamed the collapse on Athens, saying it had failed to offer anything new to secure the funding it needs to repay €1.6bn (£1.2bn) to the International Monetary Fund by the end of this month.

Germany’s EU commissioner said it was time to prepare for a “state of emergency” as Greece and its creditors stuck to their positions after the collapse of talks aimed at preventing a default and possible euro exit.

And IG analyst Chris Beauchamp said: “Are we approaching the end-game? It looks highly likely this time around. Greece has been a handy reason to clear out of stocks over the past few weeks, with Fed-related jumpiness also playing its part.”

Among individual sharp movers, Easyjet fell 2.3 per cent after RBC cut its stance on the stock to “underperform” from “outperform”.

“Our positive outlook for easyJet’s summer has proved incorrect... As summer is key, we see few positive catalysts until mid-2016 while easyJet faces a winter squeeze,” RBC analysts said in a note.

Also denting the sentiment around the budget airline and its peers were reports of new cases of Middle East Respiratory Syndrome (MERS), which could sap enthusiasm for travel. South Korea’s Health Ministry reported five new cases of MERS on Monday, taking the total to 150.

Elsewhere among the top decliners, Standard Chartered dropped 2.4 per cent after Jefferies cut its target price to 656 pence from 722 pence.

Outside the blue chips, Dragon Oil rose 8.4 per cent after the Turkmenistan-focused oil explorer said it had agreed improved takeover terms with ENOC, which increased its offer to buy out the minority shareholders. Dragon Oil said ENOC had increased its offer to 750 pence in cash per share, valuing the business at around £3.7bn.

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