All trading involves risk. Losses can exceed deposits.

FTSE below 6300 due to eurozone woes

In London, stocks are in the red as concerns about the eurozone weigh on investor sentiment.

All trading involves risk. Losses can exceed deposits.

Old eurozone worries came back to the surface yesterday when the European Central Bank (ECB) was brought before the German Constitutional Court, over allegations that the bank operated outside its task list when it purchased government bonds during the debt crisis. News of the court case pushed the cost of borrowing higher for eurozone countries, which caused a worry for investors.

Triggering further problems for the eurozone, the Athens administration suspended 2000 workers at the state TV and radio broadcaster as the Greek government has decided to shut the operation down as part of its cost-cutting programme. This could lead to strikes by stirring up anti-austerity sentiment, which may spill over into investor confidence.

In the US the Dow is down ten points at 15,112, due to traders being cautious ahead of the US government bond auction at 6pm (London time). The yield on the ten-year bond at the previous auction was 1.81%; Jim O’Neill, formerly of Goldman Sachs, believes that at today’s auction this could rise to 4%. If investors consequently start to take their money out of bonds, they might invest it in equities.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.