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Tuesday, February 27, 2024

FTSE dips over eurozone debt fears

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The FTSE 100 Index had fallen 93.1 points to 5605.9 by mid-session

Fears of eurozone debt contagion sent London’s blue chip share index plummeting in a fresh global shares sell-off.

The FTSE 100 Index tumbled by 93.1 points to 5605.9 – a drop of 1.6% – while markets also suffered across Europe, with Germany’s Dax down 1.1% and the Cac-40 in France 1.6% lower.

America’s Dow Jones Industrial Average was likewise heading for a steep fall on opening after the Thanksgiving holiday, according to futures trading.

Investor focus has now moved to Portugal as reports suggest its partners in the European Union are urging the country to seek a bail-out. The anxiety has also sent government bond yields – an important indicator of confidence – for Spain and Ireland spiking as investors rush to sell them.

And in currencies, the euro dropped against most major currencies, including the pound, dollar and yen. Sterling hit just under 1.19 euros as the single currency weakened.

The pressure on shares was compounded by worries surrounding heightened tensions in Korea, with North Korea warning that US-South Korea plans for military action put it on the brink of war.

Energy companies were also under pressure after industry watchdog Ofgem announced an investigation following recent bill hikes.

British Gas parent Centrica dropped 3% or 8.3p to 316p as Ofgem said it would probe supplier accounts after discovering their profit margins has soared 38% since September. Scottish & Southern Energy also fell, down 14p to 1142p, or 1%.

Both firms have revealed price rises in recent weeks and Ofgem said it wanted to check the “facts behind the figures” after the latest round of bill increases.

Telecoms firm BT was on a shortened list of share risers after the group said Mumbai-based manufacturing conglomerate Mahindra & Mahindra had agreed to buy a further 5.5% stake in their outsourcing joint venture Tech Mahindra from BT. BT’s shares rose 5.1p to 172p.

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