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Saturday, April 17, 2021

London market avoids risky trades ahead of Greece vote

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The London market was lower as traders avoided big bets ahead of Greece’s referendum over its eurozone bailout on Sunday.

Greek prime minister Alexis Tsipras has urged the country to vote against austerity proposals, but EU leaders have warned against rejecting the eurozone.

The FTSE 100 Index was down 26.3 points at 6604.2, as politicians prepare the ground for this crucial vote that could see Greece leave the euro.

Germany’s Dax was flat, while France’s Cac 40 was slightly down.

Spreadex analyst Connor Campbell said: “For all the excitement the Greek situation brings to the markets, it also carries with it the interminable waiting periods that suffocate investors’ appetites for risk, something that has been painfully evident this Friday.”

Britain’s dominant services sector grew more than expected last month, bouncing back from pre-election uncertainty in May.

The sector posted a reading of 58.5 on the closely-watched CIPS/Markit purchasing managers’ index (PMI) survey, in which 50 separates growth from contraction. Economists had expected a reading of 57.3.

But the this news did not greatly impact the pound, which was flat against the US dollar, at 1.56. Sterling was also broadly unchanged against the euro, at just under 1.41.

Heavyweight miners were down on news that iron ore prices have slipped 5%. BHP Billiton was 30.5p lower at 1242p, Anglo American fell 22.5p to 895.2p and Glencore was down 3.3p to 252.5p.

Royal Bank of Scotland was also 7p down to 359.1p after media reports that the bank could face a 13 billion dollar (£8.3 billion) fine from US regulators over claims that it misled investors in mortgage-backed securities.

This weighed on other high street banks with Barclays 4.2p lower at 262.3p, HSBC down 6.4p to 571.6p and Lloyds Banking Group slipping 0.7p to 85.5p.

BP was an early riser as brokers continued to react to its 18.7 billion dollar (£12 billion) legal settlement in the US yesterday to cover the Deepwater Horizon explosion and oil spill that killed 11 workers five years ago.

The 18-year deal with federal, state and local authorities, seems to draw a line under the affair and save the firm from further years of costly litigation. But shares later slipped 0.4p to 437.1p after rising earlier in the session, and coming on top of a 4% lift yesterday.

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