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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: Stocks slump as Greece votes 'no', Rolls-Royce sinks after profit warning UK stocks slumped into the red on Monday morning after the Greek public pushed the country into unchartered territory by voting a resounding 'no' to creditors' bailout proposals.
Some 61.3% of the Greeks voted 'no' against 38.7% who voted 'yes'.
"Considering that creditors insisted that [the referendum] was about staying in the euro, the outcome significantly increases the probability of a Greek exit, which is now the most likely outcome," said UniCredit analysts.
The FTSE 100 was down 0.88% at 6,528.13 early on with blue chip Rolls-Royce providing a drag after a profit warning, while mining stocks fell as investors showed an aversion to risk.
However, losses on the wider market were not as bad as feared by some ahead of the opening bell, especially considering the 2% and 3% sell-offs in Japan and Hong Kong overnight, respectively.
Spreadex analyst Connor Campbell said: "All in all, given the potential ramifications of this 'no' vote, the markets dealt fairly well with the news. Of course, they slipped into the red, but given the haemorrhaging that happened when the referendum was announced last week, this morning's losses are rather tame."
Greek Prime Minister Alexis Tsipras said that Greece would go back to the negotiating table on Monday, claiming: "The mandate you've given me does not call for a break with Europe, but rather gives me greater negotiating strength."
However, despite the 'no' vote, Greek Finance Minister Yanis Varoufakis surprised many with the decision to resign.
Rolls-Royce tumbles, miners weaken
Aerospace manufacturer Rolls-Royce shares dropped 9% after a profit warning, which the company said reflected a deterioration in offshore markets. The company said in a statement it expected full year profit to be between £1.325m-£1.475m, compared to previous guidance of £1.4m-£1.55m.
Mining stocks were out of favour, including Antofagasta, Glencore, Rio Tinto, BHP Billiton and Anglo American.
However, precious metal producer Randgold Resources was bucking the trend as investors sought safe-haven assets like gold. Also helping the stock was an upgrade by Investec from 'hold' to 'buy'.
Financials were mostly lower, including Schroders, HSBC and RBS.
Budget airline EasyJet edged higher after reporting that it carried 6.56m passengers in June of this year, nearly 8% more than in the same month last year. The load factor, which measures how full the plane is, was 92.7%, up just a touch from 92%. |
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| | Market Movers
techMARK 3,097.60 -0.54%
FTSE 100 6,528.13 -0.88%
FTSE 250 17,477.78 -0.77%
FTSE 100 - Risers
Royal Mail (RMG) 508.50p +0.69%
Severn Trent (SVT) 2,104.00p +0.57%
Fresnillo (FRES) 686.50p +0.51%
Compass Group (CPG) 1,061.00p +0.47%
Randgold Resources Ltd. (RRS) 4,279.00p +0.45%
United Utilities Group (UU.) 886.00p +0.40%
SSE (SSE) 1,561.00p +0.19%
easyJet (EZJ) 1,582.00p +0.13%
National Grid (NG.) 828.20p +0.02%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 780.50p -8.87%
TUI AG Reg Shs (DI) (TUI) 1,020.00p -2.86%
Schroders (SDR) 3,101.00p -2.30%
Royal Bank of Scotland Group (RBS) 352.00p -2.03%
Antofagasta (ANTO) 671.50p -1.54%
Ashtead Group (AHT) 1,058.00p -1.49%
Meggitt (MGGT) 457.20p -1.49%
HSBC Holdings (HSBA) 564.50p -1.47%
Barclays (BARC) 259.10p -1.46%
Reed Elsevier (REL) 1,037.00p -1.43%
FTSE 250 - Risers
Grainger (GRI) 229.70p +1.91%
Just Retirement Group (JRG) 175.00p +1.51%
Euromoney Institutional Investor (ERM) 1,201.00p +1.01%
AL Noor Hospitals Group (ANH) 950.50p +1.01%
Hunting (HTG) 548.50p +0.92%
Laird (LRD) 365.60p +0.80%
Millennium & Copthorne Hotels (MLC) 572.00p +0.79%
Evraz (EVR) 116.40p +0.78%
AO World (AO.) 132.80p +0.61%
Aldermore Group (ALD) 317.20p +0.60%
FTSE 250 - Fallers
Thomas Cook Group (TCG) 126.50p -4.09%
Fidelity China Special Situations (FCSS) 141.30p -3.75%
Jardine Lloyd Thompson Group (JLT) 1,020.00p -2.67%
Henderson Group (HGG) 253.70p -2.50%
Vedanta Resources (VED) 495.50p -2.46%
Templeton Emerging Markets Inv Trust (TEM) 506.50p -2.41%
Jupiter Fund Management (JUP) 432.20p -2.39%
Man Group (EMG) 148.70p -2.36%
COLT Group SA (COLT) 183.70p -2.34%
Ashmore Group (ASHM) 278.10p -2.28% |
| | UK Event Calendar | | Monday 06 July
INTERIMS
RM
INTERIM DIVIDEND PAYMENT DATE
Renew Holdings
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (GER) (11:00)
Harmonised Competitiveness Indicators (EU) (09:00)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
PMI Construction (GER) (08:30)
PMI Retail (EU) (09:10)
PMI Retail (GER) (09:10)
GMS
Base Resources Ltd
FINALS
Trakm8 Holdings
AGMS
Connemara Mining Co, Martin Currie Pacific Trust, Marwyn Management Partners
TRADING ANNOUNCEMENTS
Bovis Homes Group
UK ECONOMIC ANNOUNCEMENTS
New Car Registrations (09:00)
FINAL DIVIDEND PAYMENT DATE
Huntsworth, Scottish Mortgage Inv Trust, Slingsby H.C, Staffline Group, WPP |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe open: European stocks fall after Greek 'no' vote but losses capped by Varoufakis resignation European stocks dropped, German debt gained and peripheral bond yields fell as Greece's vote to reject the terms of its international bailout cast doubt over the country's future in the Eurozone, but losses were capped by the surprise resignation of Greek Finance Minister Yanis Varoufakis, which boosted hopes of a deal.
By 0900 BST, the benchmark Stoxx Europe 600 index was down 0.9%, Germany's DAX was 1.2% lower and France's CAC was 1.4% weaker.
Losses in the periphery were more pronounced, with Italy's FTSE Mib down 2.6% and Spain's IBEX 35 down 1.7%.
In debt markets, German government bonds gained as investors looked for somewhere safe to park their cash, but peripheral government bonds sold off only slightly, suggesting that fears over contagion were not elevated.
The yield on the 10-year German Bund was down 5 basis points at 0.742%. The yield on Spain's 10-year government bond was 5 basis points higher at 2.279%, while the corresponding Italian bond yield was 6 basis points higher at 2.309%.
Greek stocks markets have been closed since last week and are not due to reopen until Tuesday at the earliest.
The euro, meanwhile, was down just 0.1% at $1.1100, recouping the heavy losses it suffered in the Asian session, following the announcement by Varoufakis.
On Sunday, more than 60% of Greeks voted to reject the terms of the Eurozone bailout.
Despite the downbeat tone in European financial markets, the selloff was not a bad as expected and market participants said hopes of a deal had been boosted by the resignation of Greek Finance Minister Yanis Varoufakis, who said early on Monday that he was standing down at the request of Prime Minister Alexis Tsipras.
His resignation came as a surprise, as he had said last week that he would step down in the event of a 'yes' vote.
Varoufakis said in a blog post that he had been made aware that certain members of the Eurozone would prefer him to be absent from meetings, "an idea that the prime minister judged to be potentially helpful to him in reaching an agreement".
Varoufakis has clashed with Greece's creditors over their demands for tough austerity measures.
"Fear of the unknown, following the decisive Greek rejection of austerity, has seen global stock markets drop - however, the freefall that was predicted has not materialised, as investors wait to see how European politicians and bankers react," said Rebecca O'Keeffe, head of investment at Interactive Investor.
Analysts at HSBC said that once the dust settles on Greece, there are five key factors that will help to support European equities.
It said a Greek exit from the Eurozone is still by no means a certainty, while a policy response from the ECB is a distinct possibility. The bank also said that a weaker euro will boost earnings prospects, adding that earnings and margins are depressed and could rise strongly over the next three to five if the Greek crisis does not derail global economic growth.
Finally, it noted that valuations for European equities are by no means stretched.
Going forward, the response of the ECB will be key in determining the level of contagion to other parts of the Eurozone, while the willingness to compromise by both Greece and its creditors will also be crucial.
The ECB is expected to make a decision whether to continue providing emergency liquidity assistance (ELA) to Greece at a meeting on Monday morning. A Greek government spokesman said told ANT1 television that the Bank of Greece would make a formal request on Monday. "And we believe there are valid grounds for there to be an increase in ELA liquidity," he said.
In corporate news, shares in Rolls-Royce dropped 9% after the company warned on profits and send it was halting its share buyback programme. |
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| | Sunday share tips | | Safestore is set to continue capitalising on the growing need for self-storage facilities. The sector is growing as the housing market improves, driving demand from retail users, but companies are also increasingly using its services. That is true of small online companies who need flexible warehouse arrangements – storage can be hired and paid on a monthly basis – and of large multinationals. The latter, which includes the likes of Halfords, Diageo, Redbull or Coca Cola, sometimes need additional space at a short distance to run local promotions, for example. In the US there is 14 times more storage space available per square mile than in Britain and the occupancy rate stands at over 90%, versus 68.9% at present for Safestore. New chief Frederic Vecchioli has reinvigorated the company´s strategy. In the last financial year profits jumped 31% to £28.5m and the dividend was raised by almost 30% to 7.45p. There is more to come both in terms of share price appreciation and dividend growth. Buy, says The Mail on Sunday´s Midas column. The decision by the national park authority, on Tuesday, on whether it will allow Sirius Minerals to dig Britain´s biggest new mine in decades could send the shares soaring or crashing. The company wants to excavate a mile-deep shaft under the North York Moors to tap a huge seam of polyhalite, a type of fertiliser. The Redcar and Cleveland council has already given the project its blessing, with the firm having presented a plan to mitigate th environmenatal impact. Demand for fertiliser keeps pushing higher alongside the need for to feed the world´s growing population. The project will cost £1.7bn to build, in comparison with loss-making Sirius´s scant £27m in the bank. So obtaining approval will only be the start of the matter. However, “If you have a few extra bob and fancy a wild ride, this is your chance. But do it tomorrow - and don’t bet the farm,” writes the Sunday Times´s Danny Fortson. |
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| | Newspaper Round Up | | Monday newspaper round-up: Greece, Marks & Spencer, Bank levy "Greece's anti-austerity government scored a decisive victory in Sunday's referendum as voters backed its call to reject a compromise with international creditors, raising serious doubts about the country's ability to remain inside the eurozone," the Financial Times writes.
Marks & Spencer is set to deliver another setback in its clothing turnaround after cool weather in May and June dampened like-to-like sales, The Telegraph writes.
"George Osborne is weighing up whether to announce a review of the £3.5 billion-a-year bank levy in Wednesday's budget as one of a range of business-friendly measures," The Times says.
PayPal is reportedly on the hunt for international acquisitions as it prepares to separate from eBay in the first of several big technology split-ups this year, writes the Financial Times.
Toshiba is likely to mark down its profits by more than $800m, almost double earlier estimates, due to accounting irregularities, according to The Wall Street Journal. | | |
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