FTSE dragged lower by Greek issues

In mid-morning trading the FTSE 100 has plunged into the red over fresh Greek woes.

Source: Bloomberg

European equity markets are sustaining heavy losses as Athens gives with one hand and takes with another. No sooner had Greece got back into traders’ good books after making a repayment to the IMF, a comment from Yanis Varoufakis about the country’s solvency sparked a new selloff.

Greece has been living hand to mouth for the past five years, and now that the last bailout is due to expire next month there is the very real prospect of a default. The country scrapped together what little free cash it had to meet the latest repayment, and is now living on a shoestring budget. If the Greek government doesn’t meet the demands of its creditors over reform, a default is in the pipeline.

Shares in Experian are lower after the credit checker announced a 4% decline in full-year pre-tax profits. Unfavourable currency market movements and a poor performance in South America were cited as the reason behind the drop in earnings. From an operational point of view, Experian turned a corner and the ‘year of transition’ helped the firm increase its dividend by 5%.

easyJet survived the winter but the strikes in spring will catch up with the airline, and the disruption over Easter eclipsed the first-half profit which is hard to come by during the off season. A high level of forward bookings and cheaper fuel costs will assist the air carrier in the second-half of the year.

We are expecting the Dow Jones to open 85 points lower, at 18,020, as concerns over Greece have reached Wall Street. Not only is the US market spooked by the European equity selloff, but the remarks by John Williams of the Federal Reserve Bank of San Francisco about little or no warning over an interest rate rise is also applying pressure to the US market. Mr Williams is keeping traders on their toes and the fear of a sooner-than-expected rate rise is causing a stir across the pond.

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