Markets unwind as Greek euphoria subsides

In mid-morning trading the FTSE 100 is lower as the correction from the Greek rally last week is starting to show cracks. 

City of London
Source: Bloomberg

European markets are drifting into the red as traders have no fresh good news to justify going long. The euphoria that was experienced on the back of the Greek deal recently is being unwound, and dealers are jumping ship before the next round of the Greek crisis starts all over again.

The London market has been hit hardest by the mining sector, which is taking its cues from the financial turbulence in China. The wheels are starting to come off in China, and if Beijing is having trouble keeping its stock market in check, it does not inspire confidence in its position as the biggest importer of minerals in the world. London’s relatively high exposure to commodities makes it worse off than its eurozone equivalents.

The pound had a muted reaction to the BoE voting breakdown, as the votes painted a different picture to what Mark Carney warned recently over an interest rate hike. 

Chip maker ARM Holdings issued an optimistic outlook for the second-half, and it also rewarded shareholders with a healthy boost to its dividend, but the move in Apple in after-hours trading led the stock lower this morning. Land Securities ground out a solid first quarter, and the rising rental income accompanied by low vacancy rates will keep the stock on the slow and steady growth rate it has been accustomed to over the past eight years.

We are expecting the Dow Jones to open 50 points lower at 17,870. Tech stocks in the US have fallen out of favour with traders after Microsoft and Apple’s poor updates last night. China is at the core of Apple’s problem, and the iPhone maker is becoming too dependent on a single country which is having big problems of its own. 

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