FTSE loses 0.9% at the start of trading
City Index June 14, 2012 3:00 PM
<p>The FTSE 100 lost as much as 0.9% at the start of trading on Thursday with continued eurozone uncertainty dampening demand for riskier asset classes […]</p>
The FTSE 100 lost as much as 0.9% at the start of trading on Thursday with continued eurozone uncertainty dampening demand for riskier asset classes such as stocks.
Clearly investors are starting to focus much more towards the weekends Greek election, where a fair degree of uncertainty remains as to what the outcome could be. A victory for the leftist and anti bailout Syriza party could end up seeing Greece forced to leave the euro if the newly installed government fails to adhere to the existing agreed bailout terms. This is why the stakes are so high for this weekend and with Spanish and Italian bond yields rising yet again today, with Spanish 10yr yields threatening a breach of the highly unstable 7% level, investors are refraining from taking on any risk at present.
This has meant selling out the heavyweight mining and financial sectors, which is where the biggest drag on the UK benchmark equity index is emanating from.
There is also a focus on the successes and failures of a 3 year bond auction by Italy, which is expected to see higher yields. A lack of demand could also prove important, as it will show that Italy’s ability to tap debt markets for funding is weakening in the face of deeper contagion within the eurozone.