FTSE 100 shoved lower as Greek debt crisis deepens
London (Jun 29) U.K. stocks dropped Monday, taking part in a global equity selloff as Greece shut its banks and stock trading and moved closer to defaulting on debt.
The FTSE 100 UKX, -1.66% fell 1.5% to 6,652.78. Miners Randgold Resources Ltd. RRS, +0.53% and Fresnillo PLC FRES, +0.21% were the only shares able to retain gains, rising 1.1% and 0.3%, respectively.
British stocks were swept lower along with the broader European stock market SXXP, -2.21% and Asian equities HSI, -2.61% NIK, -2.88% before them, as discussions aimed at resolving Greece’s debt crisis broke down over the weekend. Greek voters will be asked in a referendum set for July 5 whether to accept reform measures demanded by the country’s lenders. The referendum was unexpectedly proposed Saturday by Greek Prime Minister Alexis Tsipras.
Greece closed its banks for the week and limited locals’s access to cash at ATMs after the European Central Bank said it will leave intact the limit of emergency funding it’s supplying to Greek banks. Greece faces a debt default, with a €1.54 billion ($1.72 billion) payment due to the International Monetary Fund on Tuesday, and the country needs to tap into about €15.3 billion in funds.
“The IMF deadline tomorrow now looms large, whilst investors will now be looking for any possibility of an eleventh hour rescue to prevent either or both of a Greek default or exit,” from the euro and the European Union, said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, in a note.
Monday’s fall for the FTSE 100 has left the blue-chips index nearly flat for 2015, Hunter noted, “with the volatility set to continue even if the general view is that a Greek solution may yet be cobbled together.”
Elsewhere in trading, travel stocks were under pressure after a terrorist attack Friday at a beach hotel in Tunisian coastal city of Sousse left 38 dead, including at least 15 Britons. Shares of TUI AG TUI, -7.10% slumped 6.7% and those of British Airways parent firm International Consolidated Airlines Group IAG, -3.15% dropped 3.4%. InterContinental Hotels Group PLC IHG, -2.44% lost 2.5%. On the FTSE 250 MCX, -1.44% Thomas Cook Group PLC TCG, -3.81% fell 3.8%.