Sun, Jun 10, 2018 - Page 14 News List

Financials drive FTSE down amid anxiety in Europe

Reuters, LONDON

Britain’s leading stock index tumbled on Friday, following the lead of European shares in a broad sell-off as investors were spooked by the prospect of a tightening of financial conditions and political risk.

The FTSE 100 on Friday sank 23.33 points, or 0.3 percent, to 7,681.07, falling 0.3 percent from a close of 7,701.77 on June 1.

Germany’s DAX dropped 44.50 points, or 0.4 percent, to 12,766.55, an increase of 0.3 percent from 12,724.27 a week earlier.

The pan-European STOXX 600 also edged down 0.82 points, or 0.2 percent, to 385.12, shedding 0.5 percent from a close of 386.91 on Friday last week.

The FTSE 100 saw its third straight week of losses and its worst week in more than two months.

Risk appetite dried up this week as investors in Europe warily eyed a new Italian government and the European Central Bank indicated that it could end ultra-loose monetary policy earlier than expected.

Stark divisions on trade ahead of a G7 leaders’ summit that began on Friday added to investors’ anxieties.

“Events going on that people point to, such as the G7 meeting, are all idiosyncratic things that have their impact, but I think often what you see is a broader story underneath that is affecting everything and is probably exacerbating those situations,” Agilis Investment Management chief investment officer Clark Fenton said.

“I think it comes back to quantitative tightening,” he added.

On Friday, financials were the biggest drag on the FTSE 100, selling off sharply with HSBC Holdings PLC, Prudential Financial Inc, Lloyds Banking Group PLC and Barclays PLC falling 0.5 percent to 1.3 percent.

Energy and mining stocks also sank as investors shed all the sectors seen as most exposed to the business cycle.

Antofagasta PLC, Fresnillo PLC, Anglo American PLC, BHP Billiton PLC and Glencore PLC fell 1.5 percent to 3.1 percent, while oil majors BP PLC and Royal Dutch Shell PLC dropped 0.8 percent to 1 percent.

Standard Life Aberdeen PLC shares dropped 3.5 percent, the worst performer on the FTSE 100 after Lloyds Banking sold its remaining stake in the asset manager.

The sell-off took the FTSE 100 to its lowest in more than a week.

Having underperformed European stocks since the June 2016 Brexit vote, it has come back to strength recently, although the past three weeks have driven renewed volatility.

The one silver lining on Friday was telecoms firm BT Group PLC, which outperformed the market and was up 0.6 percent after saying that CEO Gavin Patterson would step down later this year after a poorly received recovery plan.

Auto Trader Group PLC shares also gained 2.3 percent on the mid-cap index, extending its rally since reporting results on Thursday as brokers increased their ratings on the stock.

KAZ Minerals dropped to the bottom of the FTSE 250, down 6.5 percent while mining peers Hochschild Mining PLC and Centamin PLC also fell 2.5 percent to 3 percent.

Additional reporting by staff writer

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