FTSE loses 0.9% at the start of trading

<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.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.