Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a545725

FTSE decline extends to day nine; Merkel says 'nein' to eurobonds

Index suffers its second longest losing streak in history as German chancellor says jointly guaranteed eurobonds are ‘not needed and not appropriate'.

 
FTSE decline extends to day nine; Merkel says 'nein' to eurobonds

Britain’s FTSE 100 erased early gains on Thursday to fall for a ninth day, its second longest losing streak in history, after German chancellor Angela Merkel rejected ‘eurobonds’ as a solution to the eurozone’s growing debt crisis.

The UK index of blue-chip shares slid 0.24%, or 12 points, to 5,128 – down from a day high of 5,184 – and the All Share index edged down 0.15%, or four points, to 2,644.

See the FTSE’s performance and the index’s top winners and losers

‘Germany’s staunch refusal to step up to the plate and take the responsibility of being Europe’s paymaster is causing investor sentiment to erode away day by day,’ said Angus Campbell at Capital Spreads.

Merkel earlier said jointly guaranteed eurobonds were ‘not needed and not appropriate,’ speaking at a press conference with Italian prime minister Mario Monti and French president Nicolas Sarkozy in Strasbourg.

She warned that eurobonds would ‘would weaken us all’, adding:  ‘It would be a completely wrong signal to ignore those diverging interest rates because they’re an indicator of where work still needs to be done.’

Other stock markets in Europe also slipped: Germany’s DAX index was 0.54% lower at 5,428; France's CAC 40 index inched down 0.01% to 2,822; and the FTSEurofirst 300 index of top European shares lost 0.14% to 901.

Meanwhile, French borrowing costs neared a 28-month high and Italian borrowing costs hovered above 7%, around levels at which other eurozone nations were forced to seek bailouts.

And the yield, or implied interest rate, on German 10-year bunds rose nine basis points to a one-month high of 2.19%, overshooting that on 10-year UK gilts, 2.16%, in a sign that the debt crisis is leaking to the eurozone’s very core.

‘Germany is caught between a rock and a hard place,’ said John Higgins, economist at Capital Economics. ‘If she rides to the rescue of her neighbours, she will undermine her own credit standing. If she chooses not to, the eurozone will probably collapse.’

He added that upward pressure on bund yields from the ‘unsavoury dilemma’ was unlikely to relent in the near future.

'Top Stocks' in the news

Defensive stocks were among the biggest losers on the FTSE 100, following recent outperformance. Drugmaker Shire (SHP.L) dropped 48p to £19.62 and utility National Grid (NG.L) skidded 12p to 620p.

Sign in / register to view full article on one page

5 comments so far. Why not have your say?

Dislexic Landlord

Nov 24, 2011 at 17:45

Im a BTL investor and I think i take chances but when I look a investors who pick stock they take much bigger risks than me

If I was in Stocks and shares I would have been out a longtime ago

report this

snoekie

Nov 24, 2011 at 18:42

Gee whiz, she wants the benefits that the 'partnership' (in the Euro) brought, but not the liabilities, which she must have known were (could see) coming.

With partners like that, who needs enemies?

report this

Ian Garratt

Nov 24, 2011 at 22:08

How much further will markets fall?

report this

snoekie

Nov 24, 2011 at 23:43

Ian, dense fog in my crystal ball......

report this

seahound

Nov 25, 2011 at 09:38

The house of cards is starting to crumble !

Things are going to get worse before they get much worse !

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire guide to investment trusts

In association with Aberdeen Asset Management

Fund managers from Standard Life Investments quizzed on investment trusts


What can SLI bring to the table for those who want to put their money into investment trusts?

More about this:

Look up the shares

  • Shire PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • National Grid PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • IMI PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Weir Group PLC
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Sorry, this link is not
quite ready yet