It was always unlikely that the UK market would manage a strong performance today, given the uncertainty surrounding the outcome of the tonight’s ballot count, but ongoing concern over Greek debt and the Hellenic economy’s future ensured investors witnessed a fourth consecutive session of falls.
The FTSE 100 index closed down 1.5%, off 80.9 points at 5,261.0, while the FTSE 250 index shed 79.4 points or 0.8% to 9,902.7.
Yet again, worries about Greece's ability to correct its fiscal imbalances and the potential spillover to other weak euro members, namely Portugal and Spain, led to hand-wringing amongst investors. European indices suffered losses of a similar magnitude to those seen in London, while Wall Street also continued to slide.
In the UK, the spotlight was fixed firmly on today’s general election (read this article for my take on how the election outcome will affect investors) but financials felt the weight of Greece and miners with operations in Australia were also under the cosh. Barclays, Lloyds Banking Group and Standard Chartered lost 6.5%, 5.8% and 4.7%, respectively, while Rio Tinto, Anglo American and BHP Billiton shed between 0.7% and 2.6%. Even Vedanta Resources, which today far exceeded market expectations with its quarterly results, dropped 2.1%. “The results came in well ahead of expectations but the market was not particularly impressed,” commented Charles Stanley analyst Tom Gidley-Kitchin, “perhaps because the value of the shares lies a few years ahead, perhaps because of ongoing concerns over the conglomerate structure issue.”
With commodity prices heading South, other resources stocks such as Kazakh miner Eurasian Natural Resources and Anglo-Dutch oil heavyweight Royal Dutch Shell fell back 3.9% and 2.2%, respectively.
Electronics group Cobham was also out of favour, down 5.6%, after announcing delays in winning US contracts hampered its progress in the early months of 2010.
And there was no respite for retailers either after Morrison Supermarkets’ trading update contained news that sales growth has slowed and the outlook remains cautious. Morrison shares closed 3.2% weaker, while peers Sainsbury, Tesco and Marks & Spencer each shed 1.3%-2.3%.
