Equities fall as euro jitters strike again

| July 24, 2012 | 0 Comments

By
Rob Davies

16:33 EST, 23 July 2012

|

16:33 EST, 23 July 2012

Blue-chip companies were hit by a global sell-off, providing a nervy backdrop to a make-or-break week for British business confidence.

The never-ending eurozone debt crisis took a turn for the worse, with renewed anxiety over Spain, Italy and Greece taking their toll on bank stocks in particular.

RBS shed 3.3 per cent to 197.9p, Barclays lost more than 4 per cent to 152.55p, while HSBC and Lloyds fell 3.5 per cent and 2.2 per cent respectively.

Global anxiety: And the dismal start to the week comes ahead of a raft of crucial economic and corporate data

Global anxiety: And the dismal start to the week comes ahead of a raft of crucial economic and corporate data

The FTSE 100 slumped more than 2 per cent to 5533.87, mirroring even steeper falls across the 17-nation single currency bloc.
Germany’s Dax was down nearly 3.2 per cent on fears that Europe’s
powerhouse economy will shoulder the burden of any Spanish bailout.

In France, the Cac 40 sank 2.9 per cent, while Madrid’s Ibex came down 1.1 per cent.
By lunchtime on Wall Street, the Dow Jones had shed 1.2 per cent in sympathy with Europe’s falls.

The dismal start to the week comes ahead of a raft of crucial economic
and corporate data.
GDP figures are tomorrow expected to show that the economy shrank by
0.2 per cent in the second quarter, leaving Britain mired in a third
successive quarter of double-dip recession.

A slew of household names will update the market on trading.
Tomorrow will see updates from GlaxoSmithKline, BT and easyJet.

Thursday’s roll call includes Rolls-Royce, Royal Dutch Shell, Lloyds Banking Group, Unilever, AstraZeneca, BSkyB and ITV.

Barclays, under intense scrutiny over its role in the rate-fixing scandal, reports half-year numbers on Friday.
If the raft of trading updates is accompanied by a pessimistic tone, it could weigh on market sentiment.

Fresh panic in the eurozone was
sparked by worries that Spain’s cash-strapped regions will force the
country to ask its neighbours for a multi-billion-euro bailout.

Spanish 10-year bond yields hit a
euro-era high of 7.52 per cent yesterday, well above the threshold
deemed likely to trigger a bailout.

Louise Cooper of broker BGC warned that Spain is ‘a country that will make existing bailouts seem puny in comparison’.

The UK enjoyed a flight to relative safety, paying just 1.44pc to borrow money for 10 years. T

he euro continued its slide against the dollar, falling to $1.2121, while it hit a 12-year low against the yen.

The Troika group – the IMF, European
Central Bank and European Commission – visits Greece today to assess
whether it is meeting austerity targets.
If, as expected, Greece is not fulfilling the Troika’s criteria, there
will be renewed talk of a eurozone exit.

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