After taking an initial tumble, the U.K.’s main index - the FTSE 100 - crept back up throughout the trading day and closed at a level that was just slightly below the previous day’s close. The FTSE 100 finished the day at the 5,885 level, after losing 7 points, or 0.1%, of its value. The mid-cap index - the FTSE 250 - did not fare as well, losing 85 points, or 0.8%, to close at 11,203.
The initial market drop at the beginning of the day came as doubts crept in over whether Greece will be able to secure its next bail-out package.
“We are getting to the point now whereby investors are starting to lose trust in much of what is said from EU officials in Europe,” said Joshua Raymond, chief market strategist at City Index. “The disparity of views and rhetoric out of Greece, Germany and broader Europe are in direct contradiction to each other and this is making the situation so much harder to read for investors.”
Meanwhile, the credit ratings agency Moody's warned that is may downgrade the ratings for 17 global banks. HSBC Holdings (HSBA) and Barclays (BARC) are amongst the banks that are being threatened with ratings downgrades. Shares in HSBC and Barclays dipped lower at the beginning of the day, but then recovered from their losses.
Miners also put a weight on the overall market after the world's largest gold miner, Barrick Gold (ABX), reported fourth-quarter results that disappointed investors. The results "illustrate how hard it is for major gold miners to increase production while keeping a lid on costs ... Barrick is not alone in this problem," stated Morningstar analyst Elizabeth Collins. In response, mining shares took a dive. On the FTSE 100, Randgold Resources (RRS), Polymetal International (POLY) and Evraz (EVR) were the biggest losers, 2.5%-3.6% lower each. On the FTSE 250, the zinc and nickel miner, Talvivaara Mining Company (TALV), lost nearly 15% of its market capitalisation after reporting disappointing full-year results.
Shares in the aerospace manufacturer BAE Systems (BA.) lost 2.4% in value after the defence group reported a 7% decline in full-year profit. The company’s revenue was hit by military spending cuts in the U.S. and Britain
In cheerier economic and business news, U.K. consumer confidence rose in January to the highest level in five months, according to the Nationwide Building Society. In the U.S., General Motors (GM) reported its largest annual profit in its 103-year-history. In response, GM shares rallied strongly on the New York Stock Exchange.
