Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a707561
FTSE down 4% since mid September on US fears
by Chris Marshall on Oct 07, 2013 at 10:15
Britain’s benchmark share index continued the steady decline it started two-and-half weeks ago, buffeted by uncertainty over US monetary policy and growing angst over the failure of US politicians to fix their finances.
The FTSE 100 is down nearly 4% from the high of 6,659 the blue chip index reached on 19 September following the US Federal Reserve’s decision not to start reducing its bond-buying stimulus scheme. After an initial rally, enthusiasm gave way to uncertainty, with US politicians’ inability to reach a deal over US debt and prevent a partial shutdown of government services increasingly concerning markets. In ten days the US will run out of money to pay its bills, the Treasury has said.
On Monday morning, the FTSE was down 0.8% to 6,400, while Europe’s Stoxx 50 was down 1% to 2,738. Year to date the UK index remains well up on its starting position in January with gains of 9.4%.
The US dollar continued to struggle, remaining at around an eight-month low against a basket of currencies. The British pound rose 0.3% to $1.6055 against the dollar ahead of this week’s Bank of England policy meeting, where no new stimulus measures are expected from the monetary policy committee.
The oil price, which has recently been supported by US dollar weakness and economic concerns, was down 1% to $108.47 a barrel. ‘There are still no signs of the US budget dispute being resolved, and this has left investors more wary of risks,’ said Carsten Fritsch of Commerzbank. Also, oil production resumed in the Gulf of Mexico after a tropical storm.
Of London shares, Serco (SRP.L) was the biggest faller on the FTSE 250, down 3.7% to 508p, after the Sunday Times reported that the outsourcing group faces a government investigation into its largest state contracts.
Burberry (BRBY.L) shares fell nearly 2% to £15.97 after chief executive Angela Ahrendts told a French newspaper that the Chinese slowdown may not be temporary.
Marks & Spencer (MKS.L) shares dropped 2.7% to 480p after analysts at Credit Suisse warned the stock was overbought.
Rolls Royce (RR.L) was one of few blue chips making gains, up 0.4% to £11.18 after Japan airlines ordered 31 Airbus engines.
News sponsored by:
Today's top headlines
More about this:
Look up the shares
- Serco Group PLC (SRP.L)
- Burberry Group PLC (BRBY.L)
- Marks and Spencer Group PLC (MKS.L)
- Rolls-Royce Holdings PLC (RR.L)
On the road
on Dec 10, 2013 at 12:57