Greek woes weigh on European markets

In mid-morning trading the FTSE 100 is down 37 points at 6510, as grumblings out of Greece shake European stock markets. 

Greek flag
Source: Bloomberg

Equity markets are scared of the political events unfolding in Greece, and the discussion of the country exiting the euro is back in the fold. The anti-austerity Syriza party is still leading in the polls, and this could mark the beginning of the end of Greece’s relationship with the single currency. Angela Merkel is coming to terms with the possibility of Greece exiting the euro. During the eurozone debt crisis any talk of a ‘Grexit’ would have sent tremors through the stock markets, but a controlled and well-managed withdrawal may result in relatively small losses.

Ryanair is the new nice guy of the skies and the remarkable change to its image has seen customers flocking to the airline. Shares in the Irish air carrier exceeded £10 after the December figures showed seat occupancy had risen to 88% during the month. When you look at Ryanair’s performance recently the profit warnings of 2013 seem a million miles away, and the new Business Plus service will certainly capture a sizeable portion of the corporate market.

Figures from John Lewis failed to instil confidence in the wider retail sector as traders await updates from Sainsbury’s, Tesco, WM Morrison and Marks & Spencer this week. Online shopping increased by nearly one-third at John Lewis, but the over-dependence on Black Friday sales underlines how entrenched UK retailers are becoming with the price war. Offering deep discounts is all too common in the British retail sector, but the real winner is the consumer and not the shareholder.

We are expecting the Dow Jones to open 62 points lower at 17,700, as Greek woes have pushed US index futures into negative territory, but the jobs report at the end of the week could entice the bulls back into the market. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.