FTSE 100 declines again on concerns for political stability
The FTSE 100 fell by 1% during today’s trading for a wide range of reasons but the biggest impact felt came from Portugal and Egypt, where political stability is currently under threat for very different reasons. Portugal has seen something of a political backlash following its austerity measures, while Egypt currently appears to be entering the early stages of a second revolution in as many years. Adding to these woes was the continued concern over the health of the Chinese economy as it continued to show signs of an economic slowdown.
The FTSE 100 closed at 6229.87, 74.07 points down from its opening price, representing a decline of 1%. The FTSE had actually been much lower throughout the day but positive job stater from the American private sector pulled the London based blue-chip index back to more respectable levels. The report showed that 188,000 new jobs were created in the US private sector last month, its best performance in almost half a year. While the report offered temporary relief and its non-farm counterpart is due to be released on Friday, markets are expected to remain volatile until the situations in Egypt, Portugal and China are all addressed.
Naturally with so much uncertainty in the global economy there was a lot of movement from stocks in London. Barclays fell 2.25p after Standard and Poor’s reduced its rating for the high street bank from A+ to A. While this will always have a negative effect on the stock price for any financial institution, the damage was mitigated by Shore Capital reiterating their “buy” rating for Barclays – citing the rating agency’s history of basing their ratings on past events rather than the future.
With concerns for the Chinese economy still having a major effect on the markets, miners once again fell quite dramatically with Anglo-American and Vedanta Resources leading the declines in the sector with falls of 73p and 30p respectively.