FTSE sees longest slide in nine years
THE UK’s blue-chip share index ended lower for the ninth consecutive session yesterday in its worst run since January 2003 after Germany reiterated its opposition to the use of euro bonds or monetary tools to help solve the Eurozone’s debt crisis.
Following a meeting with the leaders of France and Italy, German chancellor Angela Merkel quashed market hopes that Europe’s paymaster would open the door to the launch of joint Eurozone bonds or a quantitative easing programme by the European Central Bank.
“It was a completely wrong signal; anyone that was in for the short term closed their position,” Lee Curtis, a trader at City Index, said.
With Wall Street shut for Thanksgiving, volumes on the FTSE 100 were light at 88 per cent of their 90-day average, encouraging intra-day profit taking and causing sharp moves on the index, traders said.
The FTSE 100 closed 0.24 per cent lower at 5,127,57 points, having risen to a day high of 5,184 in morning trade, boosted by better-than-expected macro data from Germany, before falling to a trough of 5,098 after Merkel made her comments.
“People were just taking profits where they could, that’s all. From an eight-days trough, they were just seeing a bit of profit and they were taking,” Adam Saward, a trader at Penson Financial Services, said.
“No-one is looking to see any good news until the end of the year,” Saward noted, adding he expects the FTSE 100 to climb around 200 points to 5,300 in the remainder of the year, pointing a 10.2 per cent annual fall.
The index fell 7.9 per cent in the last nine sessions, with banks and miners responsible for most of the losses.
However, the two sectors rebounded yesterday, led by Fresnillo and Royal Bank of Scotland, up 4.4 per cent and 3.6 per cent respectively.