Stalemate in Brussels hurts FTSE markets – London Report
THE FTSE 100 index retreated from five-month highs yesterday, with leading companies such as miner Fresnillo and utility Centrica hit by broker downgrades.
Investors adopted a cautious approach as debt-laden Greece and European Union paymaster Germany drew firm battle lines yesterday in talks on the future of Greece’s unpopular international bailout. After the FTSE closed, talks broke down.
Doubts over the outcome of Eurozone talks on Greece’s debt also made investors cautious throughout the trading period, analysts said.
“Scepticism and fear still abound about a debt agreement and Greek exit from the single currency, with what would appear still significant distance to cover before a compromise,” Mike van Dulken, head of research at Accendo Markets, said.
The blue-chip FTSE 100 index closed down 0.2 per cent at 6,857.05 points, down from a five-month high it reached on Friday.
The gold and silver mining company Fresnillo was the worst-performing FTSE 100 stock in percentage terms, falling 4.4 per cent after Morgan Stanley cut its rating to “equal weight” from “overweight”.
Centrica also weakened by 2.9 per cent after investment bank Citigroup cut its price target on Centrica’s shares.
Kyri Kangellaris, director at Horizon Stockbroking, said he would rather be betting on declines on the FTSE than betting on gains as indecision appears to be weighing on the market.
“The market is in a bit of a wait-and-see mode at the moment, because of Greece,” he said. “I’d rather be ‘short’ than ‘long’ at these levels.”
Online gambling firm 888 Holdings dropped 11.1 per cent after talks on a takeover by William Hill ended without a deal being reached.
Other fallers in the session included whitegoods e-commerce company AO World, which fell 4.83 per cent, and holiday company Thomas Cook, which slid 3.12 per cent
However, bid speculation drove up the shares of drinks group SABMiller by 1.9 per cent. The Mail on Sunday had reported that investment firm 3G Capital was weighing a £75bn bid for the beverage giant SABMiller.
The FTSE 100 reached a peak last year of 6,904.86 points, its highest since early 2000. Although it lost ground at the end of 2014, the index is up around four per cent so far in 2015.