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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London open: Greek chaos sparks market sell-off; airline stocks drop The UK stock market and indices across Europe suffered a steep sell-off on Monday morning after Greece imposed capital controls and called for a referendum on bailout terms, pushing the country nearer to an exit from the Eurozone.
Prime Minister Alexis Tsipras announced on Saturday that the government would be putting creditors' "unbearable" proposals to the public vote on 5 July. Greece's parliament has backed the plan for a referendum.
The FTSE 100 was down 1.85% at 6,628.67 after the first hour of trade, having touched a low of 6,598.64 early on. The index has not dipped below the 6,600 mark since mid-January.
After talks with lenders failed at the weekend, Greece has now effectively run out of time to secure funding to help pay its €1.6bn debt repayment to the IMF on Tuesday, the same day that its current bailout agreement expires.
Athens has confirmed that Greek banks will be closed all week due to an "extremely urgent" need to protect the financial system after the ECB decided to freeze emergency funding. Cash withdrawals from ATMs will be limited to just €60 a day.
The stock market in Athens is also expected to remain closed on Monday.
Mohamed El-Erian, well-known economist and chief economic adviser at Allianz, said he now sees "an 85% probability that Greece will be forced to leave the Eurozone".
"What we are seeing here is what economists call the sudden stop, when the payment system stops. The logic of a sudden stop is a massive economic contraction, social unrest and it's going to make continued membership of the Eurozone very difficult for Greece," he said.
Airline stocks slide
Travel tour operators TUI and Thomas Cook dropped sharply in early trading as investors expressed concerns about Greece and the impact of potential social unrest on the travel market. Wider concerns about the disruption on tourism from recent terrorists attacks in Paris and Tunisia were also likely dampening sentiment.
Similarly, airline peers IAG and Easyjet were also trading in the red. IAG in particular was registering heavy losses after the company offered concessions in its bid to merge with Aer Lingus after regulators raised competition concerns.
Stocks in the financial sectors such as Hargreaves Lansdown, Aberdeen Asset Management and Henderson Group were falling as market volatility increased across Europe.
FTSE 100-listed drinks bottler Coca-Cola HBC, which has a secondary listing in Athens, was also suffering heavy losses.
Just two stocks on the blue-chip index, precious metal miners Randgold and Fresnillo, were making gains as investors sought out safe-haven investments such as gold. |
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| | Market Movers
techMARK 3,118.38 -1.61%
FTSE 100 6,628.67 -1.85%
FTSE 250 17,522.01 -1.69%
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 4,411.00p +0.85%
Fresnillo (FRES) 700.00p +0.29%
FTSE 100 - Fallers
TUI AG Reg Shs (DI) (TUI) 1,029.00p -7.55%
International Consolidated Airlines Group SA (CDI) (IAG) 496.00p -3.60%
Hargreaves Lansdown (HL.) 1,153.00p -3.51%
Dixons Carphone (DC.) 451.90p -2.96%
Coca-Cola HBC AG (CDI) (CCH) 1,387.00p -2.94%
easyJet (EZJ) 1,531.00p -2.92%
Standard Chartered (STAN) 1,024.50p -2.89%
Old Mutual (OML) 203.60p -2.77%
CRH (CRH) 1,808.00p -2.74%
Barclays (BARC) 265.10p -2.66%
FTSE 250 - Risers
Centamin (DI) (CEY) 63.15p +0.96%
Grainger (GRI) 225.00p +0.67%
OneSavings Bank (OSB) 317.20p +0.60%
Ocado Group (OCDO) 428.20p +0.59%
Aggreko (AGK) 1,452.00p +0.21%
Acacia Mining (ACA) 307.70p +0.13%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 97.75p +0.10%
John Laing Infrastructure Fund Ltd (JLIF) 122.00p +0.08%
FTSE 250 - Fallers
Thomas Cook Group (TCG) 134.60p -6.66%
Euromoney Institutional Investor (ERM) 1,140.00p -5.55%
Henderson Group (HGG) 263.00p -4.50%
Vedanta Resources (VED) 543.00p -4.06%
esure Group (ESUR) 247.00p -4.04%
Fidelity China Special Situations (FCSS) 146.50p -3.93%
Evraz (EVR) 123.00p -3.68%
Man Group (EMG) 158.90p -3.64%
Bodycote (BOY) 691.00p -3.63% |
| | UK Event Calendar | | Monday 29 June
INTERIMS
Porvair
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
Business Climate Indicator (EU) (10:00)
Economic Sentiment Indicator (EU) (10:00)
Pending Homes Sales (US) (15:00)
GMS
Castleton Technology, JSC RusHydro GDR (Reg S)
ANNUAL REPORT
Bonmarche Holdings
AGMS
4D Pharma , Advanced Oncotherapy, Anglo Asian Mining, Anglo-Eastern Plantations, Ariana Resources, Baron Oil , Beowulf Mining, BH Global Ltd. GBP Shares, Elderstreet VCT, Energiser Investments, Federal Bank Ltd (The) GDR (REGS), GLOBO, Kemin Resources, Paternoster Resources, Savannah Petroleum , Starcom, Tiger Resource Finance, Trans-Siberian Gold, Trinity Exploration & Production, Vianet Group, Volvere, Xtract Resources
UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
FINAL DIVIDEND PAYMENT DATE
Pacific Assets Trust
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | European stocks tumbled at the open, the euro lost ground against the dollar, Greek bonds took a beating and German Bund prices rose, as the Greek debt saga took a turn for the worse, with capital controls now in place to prevent the country's banking system from collapsing.
Greek Prime Minister Alexis Tsipras has called for a referendum on 5 July so the people can decide whether to accept the terms of the bailout being offered by international creditors.
Meanwhile, European finance leaders have refused to extend Greece's bailout beyond Tuesday and the European Central Bank has frozen its emergency liquidity assistance to the debt-ridden country. As a result, the Greek government has imposed capital controls, closing the country's banks for a week and imposing a cap of €60 a day on cash withdrawals.
Early on Monday, European Union commissioner for economic and financial affairs Pierre Moscovici said on French radio that EC president Jean-Claude Juncker will put forward new proposals in Brussels later in the day. Moscovici said the EC was willing to re-start negotiations with Athens in a bid to avert a default.
By 0830 BST, the benchmark Stoxx Europe 600 index was down 2.7%, while France's CAC and Germany's DAX had both fallen 4%.
The Greek stock market was closed by government decree, but elsewhere in the periphery, Italy's FTSE MIB was down 1.7% and Spain's IBEX 35 was 3.3% weaker.
With Greece hurtling towards default, investors sought the safety of German debt and gold. The yield on the 10-year German government bond was down16 basis points at 0.767%, while gold futures for August delivery rose 0.6% to $1,180.70 on the Comex.
Meanwhile, Greek bonds took an absolute battering, with the yield on the 10-year up 367 basis points at 14.55%. The corresponding Spanish and Italian government bond yields were up 19 and 20 basis points at 2.308% and 2.349%, respectively.
In currency markets, the euro recovered from heavy losses in Asian trade, but was still 0.6% lower against the greenback at $1.1100. In Asian trading, the single currency fell to an eight-year low against the pound.
"The Greek debt crisis really is a 'crisis' now," said Societe Generale strategist Kit Juckes.
Despite the downbeat tone, analysts said heavy losses were unlikely to be sustained and pointed to the fact that the ECB would likely limit contagion.
"Given market optimism towards a Greek deal over the last week, the initial risk-off move could be pronounced. Post the initial shock, the ECB's response and sticky domestic capital should limit contagion," said Deutsche Bank strategist Francis Yared.
Yared also pointed out that the situation is different from 2010-2012 given a reduced direct exposure to Greece from the non-domestic private sector, the improved capital and liquidity position of European banks, the improved fiscal and external position of the periphery and the existing ECB firewall.
"Peripheral spreads will widen, but the extent of the widening will be determined by the speed and strength of the ECB's reaction function. Beyond the initial sell off, outright peripheral yields should stabilise if the ECB proves to be as aggressive as we expect and domestic capital remains sticky," said Yared.
Corporate news flow was scarce, but Novartis was in focus after saying it has agreed to buy Australian biotechnology company Spinifex Pharmaceuticals. |
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| | US Market Report | | US close: stocks mixed ahead of Greece's critical weekend US stocks closed mixed on Friday, as investors weighed up better-than-expected consumer sentiment data with Greece's upcoming critical weekend talks.
At close, the Dow Jones Industrial Average was up 57 points at 17,947, the S&P 500 was down one point at 2,102 and the Nasdaq declined 32 points to 5,081.
Consumer sentiment rose to a final June reading of 96.1, reaching a five-month high after a decline in May, according to reports on the University of Michigan gauge. Economists had expected the final June figure to match a preliminary result of 94.6.
European stocks fell as investors looked to weekend negotiations between Greece and its creditors after the latest round of talks failed to yield an agreement, just days before Athens is due to repay its €1.6m debt to the International Monetary Fund.
Elsewhere, Asian stocks fell, with China's Shanghai Composite Index dropping 7.40% on concerns about overvaluation in the country's stock market.
"I expect to see significant risk aversion... with investors preparing for fireworks over the weekend," said Craig Erlam, senior market analyst at OANDA.
"The rhetoric coming from both camps over the last couple of days doesn't make for nice reading and many people will be preparing for the worst-case scenario if both sides refuse to back down on key issues, most notably pensions, and accept the consequences," he added.
In company news, Micron Technology tumbled 18.2% after the semi-conductor company reported a drop in third-quarter earnings late on Thursday. In the wake of the results, analysts at Stifel Nicolaus, JP Morgan, Raymond James, Pacific Crest and Wells Fargo all cut their targets on the stock.
Celladon Corp dipped after the the biotechnology warned that it could be forced to liquidate.
UnitedHealth Group surged on a series of analyst upgrades, which came after the Supreme COurt ruling upheld Obamacare subsidies on Thursday.
Oil prices edged lower, with West Texas Intermediate losing 0.3% to $59.54 a barrel, while Brent shed 0.1% to $63.17 a barrel. Gold futures advanced, while the dollar gained against the euro, yuan and the pound.
Investors sold off Treasurys, driving the 10-year note up to 2.76%. |
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| | Newspaper Round Up | | Monday newspaper round-up: Greece, UK banks, Samsung Bioepis Greece has temporarily shut down its banks and suspended trading on its stock market after the collapse of talks between Athens and its lenders and the ECB's decision to freeze life support for Greek banks, reports The Telegraph.
An annual survey of the world's top 1,000 banks by The Banker has shown that HSBC, RBS and Barclays have fallen down the rankings as Chinese rivals surged ahead, reports The Guardian.
Samsung Bioepis has announced plans to list on the Nasdaq with a target valuation of at least $8bn as part of a broader restructuring at the South Korean parent company, the Financial Times says.
UK infrastructure spending rose nearly 72% in the first few months of the year, boosted by renewable energy and road projects, the Financial Times writes.
Sirius Minerals' plan to mine 2.7bn tonnes of potash in the North York Moors is to face a national park's committee this week, marking the culmination of five years of planning to build on of Britain's biggest mines, The Times writes.
The Bank of International Settlements has warned that monetary policymakers are defenceless against the next financial crisis, as central banks have used up their ammunition to tackle the last crises, The Telegraph writes.
A poll by the CBI has shown that financial firms want the government to cut the cost of complying with new regulation, according to The Guardian. Policy body camera manufacturer Vievu has been snapped up by security products group Safariland ahead of the latter's planned IPO next year, writes The Wall Street Journal. |
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