View the article online at http://citywire.co.uk/money/article/a581387
Spain's bond yields retreat, FTSE wavers after sell-off
Spanish government bond yields fall and FTSE 100 drifts following Tuesday's sell-off in equities and ‘peripheral’ eurozone debt.
Spanish government bond yields pulled back and Britain’s FTSE 100 wavered on Wednesday, following a sell-off in the previous session in equities and ‘peripheral’ eurozone sovereign debt triggered by fears over Spain’s fiscal outlook.
The UK index of blue-chip shares eased 0.03%, or two points, to 5,594 and the All Share index weakened at 0.05%, or two points, to 2,910. See the FTSE’s performance and the index’s top winners and losers.
The yield, or implied interest rate, on benchmark 10-year Spanish government bonds retreated eight basis points to 5.92%, after opening at a four-month high of 6%. Italian government bond yields also pulled back slightly, as those on the perceived safe haven paper of the United States, Germany and Britain climbed.
According to Cagdas Aksu, fixed income strategist at Barclays Capital, Tuesday’s moves ‘effectively show us that most of the good news in the form of three-year LTROs and successful Greek PSI is behind us now’. He was referring to a flood of cheap loans unleashed by the European central bank and a Greek debt swap.
‘Market focus will be mainly on fundamentals and delivery of reforms in Italy and Spain,’ he added.
The euro rebounded 0.28% versus the dollar to $1.312, and was flat against sterling at €1.212.
Martin Van Vliet, economist at ING, said that amid risks to Spain’s planned fiscal consolidation, its bleak economic outlook and lingering doubts over the health of parts of its banking system, there is a risk that its bond yields could continue to rise.
‘The chance that Spain will need financial assistance from the EU and/or the IMF is also rising, but we have not yet reached the point where we think this is inevitable,’ he added in a research note.
Other stock markets in Europe also inched up: Germany’s DAX index gained 0.71% to 6,653, France's CAC 40 index strengthened 0.12% to 3,221, and the FTSEurofirst 300 index of top European shares was 0.19% higher at 1,028.
Security services firm G4S (GFS.L) topped the FTSE 100 leader board, adding 9.5p to 282.6p, after Morgan Stanley upgraded the stock to ‘overweight’ from ‘equal weight’.
BSkyB (BSY.L) was the biggest faller on the index, dropping 11p to 643p after Bank of America Merrill Lynch cut its recommendation for the broadcaster to ‘underperform’ from ‘neutral’.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
on Apr 27, 2017 at 05:00