LONDON (ShareCast) - 1630:Close Concerns about Spain's financial health and renewed speculation about a Greek exit from the Eurozone sank European markets on Monday. The Bank of Spains Economic Bulletin shows that Spain continues to hampered by the worsening financial tensions in the Eurozone and reveals that the countrys economy is expected to contract by 1% year-on-year in the second quarter. Despite the vote in favour of the 'up to 100bn' loan for Spain on Friday, the focus has now shifted to Spain's regions, after Valencia (Murcia and Catalonia may do so as well in short order) asked the government for financial help from the newly established support fund. Markets are now concerned that this will lead to a full-scale bailout for the southern European nation. The FTSE closed down 118 points at 5,534.
1546: Evraz continues to be the worst performer on the Footsie today. Of interest in this regard, the FT´s Alphaville is calling attention to the cautious wording of a Morgan Stanley note on the company. While the broker has reiterated its overweight stance on Evraz it does not shares the company´s forecasts on metal prices and as regards the outlook for some of its projects. Hence, neither does it expect its EBITDA to be quite as strong as the firm´s executives. A decision by Spain´s market regulator this afternoon to also implement a ban on short-selling may help to stabilize things a tad. FTSE 100 down 129 to 5,523.
1453: The sell-off continues with US markets opening firmly in the red. The Dow, Nasdaq and S and P 500 have opened down 1.73 per cent, 2.25 per cent, and 1.72, respectively. In London, the Footsie is trading 138 points lower at 5,514, with every constituent on the benchmark either flat or registering losses. The last time the index closed lower than this was on June 28th, when it finished the day at 5,493. On the second-tier FTSE 250, LED lighting producer Dialight is a rare bright spark, up 7.5 per cent, after announcing a large European order on the same day that it revealed strong revenue and profit growth in the first half.
1331: The FTSE 100 is now trading 110 points lower at 5,542, a level not seen since late June.
1211: The Footsie seems to have bottomed out at 5,555, having traded around that level for the last few hours, as European markets dive on the back of renewed Greek exit fears and soaring Spanish bond yields. London's financial and mining sectors have once again bore the brunt of the euro-fuelled sell-off, with Evraz, Aviva, Vedanta and RBS among the worst performers. Stateside, US stock futures are pointing to over one per cent falls for Wall Street's benchmarks in pre-market trading with Eurozone concerns in the spotlight.
1108: The Footsie is down 96 points at 5,556, its intraday low, as bond yields in Spain surge. The borrowing costs on 10-year Spanish debt continue to set record highs on the back of concerns over the country's financial health - the rate now stands 22.4 basis points higher on the day at 7.491 per cent.T he focus has now shifted to Spain's regions, after Valencia and Murcia asked the government for financial help from the newly established support fund. Analyst Craig Erlam from Alpari has said these requests 'are likely to spark a full bailout request from Spain'.
1037: Miners and financials are leading on the downside this morning on the top share index. Amongst the latter the worst performers are now Aviva and Royal Bank of Scotland. JP Morgan Cazenove has cut its target on the former to 414p (from 432p) while Exane BNP has reduced its target on shares of RBS to 250p from 280p before. Out on the FTSE 350 Afren is one of the worst stocks this morning as it tracks oil futures lower. African Barrick Gold is also doing poorly after news broke of its offer to buy up the outstanding share capital of Aviva Mining (Kenya), its first expansion outside Tanzania. Aquarius Platinum has warned the firm is likely to be hit by strikes over the South African winter. FTSE 100 down 98 to 5,554.
0813: European stocks have begun the week sharply lower after reports surfaced over the weekend that the IMF may decide not to disburse the next installment of aid to Greece. That as senior German policymakers voice their concern over the Eurozone´s ability to rescue the Mediterranean nation. In parallel, Spanish bond yields have opened the session at euro-era record highs. That alongside a single currency which is now trading well below Friday´s closing levels (although Eur/gbp is only marginally lower). Are we seeing Greek contagion or fears over Spain? Either way, market commentators are now putting emphasis on the fact that Spain can only hold out for two or three more months longer, given such high financing costs, before being forced to ask for a full fledged rescue. Has Spain done enough on the reform front? That may be the question which the ECB is pondering before wading into bond markets. Nevertheless, in an interview with Le Monde the ECB´s Mario Draghi reiterated his view that the single currency is irreversible. Downbeat remarks from a high-ranking Chinese official are also weighing on London. FTSE 100 down 62 to 5,590.