BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Equities

Risk of Greek fallout hits European stocks

Posted on December 30, 2014

Tuesday 21:00 GMT. Global equities lost momentum on Tuesday, with European equities dropping as the snap election called in Greece drew in further casualties.

Shares on Wall Street also eased but benchmark indices still remain near record highs. The S&P 500 closed 0.5 per cent lower at 2,080.35 points, while the Dow Jones Industrial Average ended the session 0.3 per cent weaker.

    The declines were steeper in Europe, where the international FTSE Eurofirst 300 ended the session down 1 per cent at 1,362.85, its weakest close for four sessions. The Xetra Dax 30 in Frankfurt fell 1.2 per cent, while the Paris CAC 40 lost 1.7 per cent and London’s FTSE 100 fell 1.3 per cent to 6,547.

    The Athens General index fell a further 0.5 per cent to 816.15, heading back toward its weak point for the year of 756.8 after adding to Monday’s 12 per cent plunge.

    The lingering uncertainty was caused by the potential rise to power of the leftwing Syriza party, which intends to renegotiate Greece’s international bailout. After heading sharply higher on Monday Greece’s 10-year sovereign borrowing costs eased by 6 basis points to 9.54 per cent.

    “The calling of early elections in Greece has triggered a number of fresh questions about the outlook for the eurozone,” said Jens Nordvig at Nomura Securities.

    “The key risk is a Syriza win on January 25, and a subsequent shift towards confrontational policies with the EU, IMF and ECB.”

    Nonetheless, broader dollar-weakness helped the euro’s continued rally above its pre-Christmas year-low. The shared currency gained 0.2 per cent to $1.2156.

    Its US counterpart’s long, strong run higher in 2014 left it ready for a break as the year-end loomed. The dollar index, which tracks the US currency against a range of its peers, slipped 0.2 per cent to 89.97. Since January, it is up by around 12 per cent. Sterling strengthened 0.3 per cent to $1.5564.

    There was some US data and it pointed to a continued cooling of the American housing market. The S&P/Case-Shiller index for the month, which monitors house prices in 20 cities, showed a seasonally adjusted 0.1 per cent month-on-month decline.

    The wider sense of caution helped haven assets. Japan’s yen was 1.2 per cent stronger against the dollar at Y119.17, while gold rose 1.8 per cent to $1,204.16.

    Asian equities markets also fell back, with traders unwilling to add to their risk exposure. Japan’s Nikkei 225 fell 1.6 per cent during the session — its last of 2014. The fall cut the Tokyo benchmark’s advance for the year to 7.1 per cent. In Australia, the S&P/ASX 200 fell 1 per cent as recent losses for commodity prices hit the resource-rich nation’s mining and oil stocks.

    The FTSE All-World index fell 0.5 per cent.

    Brent crude, which briefly climbed above the $60 mark on Monday, was 0.6 per cent lower at $57.55 after touching a fresh five-year low of $56.74 a barrel. Nymex WTI, the US benchmark, ended the session higher in New York up 0.1 per cent at $53.68 after earlier declining to $55.48 a barrel. Volatility in energy markets hurt oil stocks across the globe. In London, BP shares fell 2.1 per cent, while France’s Total lost 2.8 per cent.