A mixed day for corporate news and uncertainty ahead of the key European meeting to discuss the future of Greece’s finances pushed markets slightly lower.
The FTSE 100 finished down 10.95 points at 6818.17, while European markets also slipped back. In the US the Dow Jones Industrial Average was down around 40 points by the time London closed. Chris Beauchamp, market analyst at IG, said:
All of today’s action, what little there has been of it, has taken place in the shadow of the Eurogroup meeting today. Greek finance minister Yanis Varoufakis goes into the meeting almost entirely without allies, Germany having lined up a formidable coalition to oppose any changes to Greece’s current financial status. Both sides are firmly entrenched, and the weary truth of the matter is that the eurozone, financial markets and investors will all need to go through several rounds of negotiation, before time pressures finally force some kind of compromise. Weaker commodity prices, which have already been hit by Chinese data this week, took a knock again as the dollar rose on caution ahead of developments in Europe.
So mining groups were lower, with Anglo American down 25.5p at 1123.5p and Randgold Resources off 90 points at £51.35.
A day after JP Morgan Cazenove cut its recommendation on Royal Mail, its shares slipped again after another downbeat note. It closed 7.3p lower at 424.9p after Deutsche Bank said:
We continue to believe that Royal Mail faces significant challenges, with rising competition in UK mail, UK parcels and GLS (European parcels). In addition, mail volumes are in structural decline and actions from Ofcom, the regulator, in our view, do not seem overly supportive for Royal Mail.
But [it] does generate strong cashflow and has a strong balance sheet in part due to on-going property disposals. Despite the operational headwinds, we retain our hold recommendation as we expect Royal Mail to be able to sustain a 20p dividend medium term, which equates to healthy 4.4% or so yield.
Reckitt Benckiser rose 185p to £57.75 after its results, while BT was 16.2p better at 460p after it was deemed to have cut a good deal for the latest record breaking Premier League rights package. Sky, which some analysts believe could have overpaid by more than £300m, lost 21p to 933p.
Tullow Oil dropped 29.7p to 384.6p after making its first loss for 15 years and scrapping its dividend.
