The FTSE 100 recorded its worst week this year as traders took an increasingly bleak stance on Greece’s refusal to cough up 300m euros to the IMF, ‘Grexit’ looking ever more likely. A rout in global bonds and the Greek debt crisis have rattled investors and the UK’s blue-chip shares index posted its biggest weekly decline since December – dropping 180 points on last Friday’s close.
There were no shocks out of OPEC’s meeting in Vienna. Retailers fell, as did property.
FTSE 100 lost 54.64 points on Friday, or 0.8%, to 6804.6. FTSE 250 fell 159.13, or 0.88%, to 17,931.3. At 4.44pm, crude prices were barely moved as OPEC left its output levels intact, as predicted. Greece PM Alexi Tsipras is being called to book by MPs over so far failed debt talks. Talks between Greece and the European Union have yet to yield agreement on the release of much-needed bail-out cash to save the country from running out of money.
Greece told the IMF that it would postpone the €300million payment which was due Friday and instead bundle this together with others due at the end of the month, when the bill will come to €1.6billion.
The pound was lower against the euro – despite the uncertainty over Greece – at 1.36. The single currency has been strengthened in recent days by the return to positive inflation after turning negative for a few months.
The bond markets have suffered an aggressive sell-off in recent days on signs that the global economy is likely to avoid mass deflation and hopes that the eurozone is emerging from its crisis. The brighter outlook – notwithstanding the situation in Greece – has left investors little incentive to hold ultra-safe bonds offering ultra-low returns
Meanwhile, in the US shares regained some poise Friday with the Dow Jones down 0.15 per cent, or 27.4 points, to 17,878 after a strong US jobs report for May. Treasury Bonds fell sharply following the jobs report due to expectation that the Federal Reserve would raise rates later this year probably in September.