Nearly all companies on the FTSE 350 were in the red by the end of the day, as concerns persisted over Greece’s possible exit from the euro currency union. Fears over Greece were reflected in other markets across Europe, with large drops seen on major indices across the continent.
“The major European markets have seen a heavy sell off as we have progressed through Monday,” said Fiona Cincotta, a market analyst at City Index. “These sharp sell offs are reflecting concerns about the eurozone crisis, politically in the case of Greece, coupled with rising Spanish and Italian bond yields, and also nagging worries over the global growth outlook. With the focus very much on the political situation in Greece, investors are distancing themselves from riskier assets with the banking and mining sectors experiencing the sharpest drops.”
Barclays (BARC) was the biggest faller on the FTSE 100, with shares plunging by nearly 6.5%. Lloyds Banking Group (LLOY) and Royal Bank of Scotland (RBS) were also dipping lower, with shares off by 5.5% and 5%, respectively.
These losses helped pull the FTSE 100 down by 110 points, or 2%, to close at 5,466. The FTSE 250 index also slumped by 203 points, or nearly 2%, closing at 10,814.
The term “Grexit” is now on the lips of traders and investors across the continent as people brace themselves for a Greek exit. “When you’ve got central bankers talking about how to deal with a possible ‘Grexit’ then it really is more likely that the euro as we know it today could be very different to the euro we’ll know at the end of the year,” said Simon Denham, CEO of Capital Spreads. “Many parts of the market have been preparing for a [Greek] exit for some time now and for them what’s happening is just the beginning of the end of their euro membership.”
