FTSE slips as fear grips eurozone

In mid-morning trading the FTSE 100 is down 45 points at 6588, as uncertainty in Athens rattles the London market. 

City of London
Source: Bloomberg

The possibility of the anti-austerity Syriza party gaining control in Greece is exercising traders' minds this morning, leading to a firmly cautious mentality developing in UK and European indices. The fear factor in the eurozone is being exacerbated by thin trading volumes, but it is clear that the prospect of a fresh election in Greece is a major worry. For now the situation is more a political crisis than a financial one, but the reignition of the eurozone problem is certainly an unwelcome development after a year in which many thought the crisis had left us for good.

Clothing retailer Next has put its October profit warning firmly behind it by releasing a very encouraging post-Christmas trading statement. Shares in the fashion house are at the top of the FTSE 100 leader board after it raised its full-year profit guidance, ending any fears that discounts would damage year-end results. Next is still cautious about its outlook for 2015, but that didn’t stop the second largest clothing retailer in the UK from delivering a 50p special dividend.

KAZ Minerals has managed to reduce the rate of interest on its bank debt by 30 basis points, which will give the recently restructured miner some much needed breathing space. Asset stripping and reorganising has been popular with natural resource companies because of the slump in the metal markets, meaning the firm should be in a stronger position for the new year.

In the US we are expecting the Dow Jones to open 33 points lower at 18,005, as creeping fears in the eurozone are making their way across the Atlantic. US consumer confidence and house price data help to enliven the trading session, but it is the situation in Greece that will dominate trading this afternoon.

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