Markets stabilised this morning following yesterday’s panic, the FTSE 100 opening above Thursday’s closing price and initially heading towards a 1% gain. Some reassurance may have been taken from statements out of the Group of 20 (G20) meeting in which it was suggested all steps would be taken to calm the global system. However with nothing more than words supporting the early uplift, sentiment soon reversed and the market headed into negative territory. The FTSE breached the 5,000 level that provided some resistance in previous trade, falling to a low of 4928 before recovering through the afternoon.
Investors were unsettled by a statement from Deutsche Bank claiming that European banks may face greater write downs on their Greek government debt exposure above the 21% agreed in the private sector involvement. Having seen dramatic declines in yesterday’s sell-off however, the UK’s banking stocks fared well when considering the volatile swings seen recently, and even managed to recover from losses to finish the day among the FTSE’s best performers. Imperial Tobacco’s 3.4% gain punctuated the financials monopoly of the top 5 positions. The asset manager Man Group and RBS were not far behind Lloyds and Barclays that topped the leader board with gains of around 5%.
The biggest losses were once again experienced in those companies with the greatest cyclical exposure, notably miners and oils. Weir Group was the worst performer on the day, the industrial engineering company losing 6.3%. The FTSE 100 managed to rally from its lows to finish the day up 12 points at 5053, a 0.23% gain for the day but a disappointing 5.9% loss for the week, roughly in line with its European peers, the CAC and DAX. Gold and silver were down 4.5% and 11.3% at the time of writing, many suggesting the dramatic declines were attributable to the liquidation of gold positions to fund margin requirements for struggling equities.