Mixed day for European markets
European investors appeared to be a little nervous following the result of the German elections. As expected Angela Merkel remains Chancellor, but the better than expected performance by the far right party AfD took some of the shine off her victory.
In the UK banks and insurance shares were under pressure as Labour unveiled proposals to cap interest rate payments on credit cards, while the Bank of England said UK banks need to set aside an extra £10bn to cover potential losses on car loans, and credit cards.
Meanwhile in the US, a fall in technology stocks Facebook and Apple sent markets lower, as did the comments from North Korea that the US had now declared war on the country. The final scores in Europe showed:
- The FTSe 100 finished down 9.35 points or 0.13% at 7301.29
- Germany’s Dax edged up 0.02% to 12,594.81
- France’s Cac closed 0.27% lower at 5267.13
- Italy’s FTSE MIB fell 0.63% to 22,389.57
- Spain’s Ibex ended 0.86% lower at 10,216.5
- In Greece, the Athens market lost 4.06% to 742.49
On Wall Street, the Dow Jones Industrial Average is currently down 72 points or 0.33%.
On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.
Oil jumps to highest level since July 2015
Crude is at its best level for more than two years after producers said output cuts were having an effect, and fears grew that supplies from Kurdistan could be curtailed.
Brent has jumped 2.7% to $58.39 a barrel while West Texas Intermediate added 2% to $51.77. On Friday an Opec meeting said that an agreement to cap production was helping to reduce the global supply glut.
Meanwhile Turkey threatened to cut oil flows from Iraq’s Kurdistan region in response to its referendum on independence, which Turkey does not recognise.
Back with the German election, and the results have unnerved Greece whose dependency on Berlin for emergency bailout funds has made it ever more vulnerable to developments elsewhere. Helena Smith reports:
The Greek prime minister Alexis Tsipras was among the first to congratulate the German chancellor Angela Merkel on her four-time electoral victory:
“A Europe of solidarity and democracy is today more necessary than ever before. Whoever, believes in this, should, despite differences, work together for the deepening and expansion of European values.”
More dependent than other EU member states on which way the election went, Greek officials are this morning trying to decode the result.
Despite Die Linke, the ruling leftist Syriza party’s official choice, posting its second best election result ever, the unexpectedly strong showing of AfD has sent shudders down the spines of many in a country where the neo-Nazi Golden Dawn party is the third biggest political force.
The strong showing of the bro-business FDP and the strong likelihood of Merkel entering into coalition with the party, is also causing consternation. It’s leader Christian Linder takes a tough line on debt-stricken Greece’s euro zone membership.
“If there was a debt cut for Greece, as the International Monetary Fund suggests, then we should be open-minded to finally solving the problem,” he said in a recent interview with Bloomberg. “Greece gets a debt cut, the money is gone, but for that Greece has to leave the eurozone, get a new currency of its own which it can devalue and increase its competitiveness in tourism.”
Greek politicians worry that Linder will be following up his rhetoric by requesting the post of finance minister in Berlin.
Meanwhile Jeroen Dijsselbloem, visiting chairman of the eurogroup ministers represening countries in the single currency, has urged Greece to implement the reforms that will enable it to make a “clean exit” from its third and current bailout program.
“There is a joint interest in getting the third [bailout compliance] review done quickly,” he said during talks with Tsipras.