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Thursday, January 26, 2023

FTSE down amid eurozone uncertainty

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The FTSE 100 Index closed down 30.2 points at 5668.7

The London market has been hit by further volatility amid uncertainty over the deepening eurozone debt crisis.

Stock markets worldwide slumped into the red as investor focus moved to Portugal, with reports suggesting its partners in the European Union are urging the country to seek a bailout.

The FTSE 100 Index tumbled more than 1.7% at one stage, but later pulled back from heavy losses to close down 30.2 points at 5668.7.

Markets suffered across Europe, with Germany’s Dax down 0.4% and the Cac-40 in France 0.8% lower.

US stocks followed the decline as Wall Street’s Dow Jones Industrial Average fell 0.8%, despite signs of good sales on Black Friday – the beginning of the US Christmas shopping season. The anxiety has also sent government bond yields – an important indicator of confidence – for Spain and Ireland spiking as investors rushed to sell them.

A weakened euro dragged the pound down with it, with sterling hitting a two-month low against the dollar at 1.56.

Energy companies were 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 had soared 38% since September. Scottish & Southern Energy also fell, down 8p to 1148p.

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

The biggest Footsie risers were Capital Shopping Centres up 20p at 401p, BT ahead 7.3p at 174.2p, Autonomy up 50p at 1,341p and Weir ahead 49p at 1,756p. And the biggest Footsie fallers were Royal Bank of Scotland down 2.2p at 38.7p, Lloyds off 2.9p at 61.9p, Antofagasta down 52p at 1,325p and Man Group off 9.7p at 269.7p.

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