1st July 2015
The FTSE 100 saw its worst monthly performance in more than three years in June as Greece woes continued to rattle the markets.
Yesterday the FTSE fell for the fourth consecutive day. It was down by 1.5% yesterday and has now fallen by over 8% since its recent peak of 7,104 (closing price on April 27 2015).
Laith Khalaf, senior analyst, Hargreaves Lansdown, says: “Investors would be well-advised to keep their heads, particularly when all about them are losing theirs. While the Greek debt negotiations will continue to affect stock prices and create headlines, it’s important to keep some perspective.
“The UK stock market is still only marginally lower than the start of the year, and with such low yields on cash and bonds, it still represents an attractive home for long term money. Indeed when there is weakness in stock markets it’s usually the time to buy in, not sell out.”
Russ Koesterich, global chief investment strategist at Blackrock, says: “While last week initially provided some hope that Greece and its creditors were moving closer together, market expectations for a quick resolution took a nosedive over the weekend. Greek prime minister Alex Tsipras’s announcement of a referendum was swiftly followed by the Eurogroup announcing that the program of financial support due to expire on June 30th would not be extended. Following that decision the ECB announced that it will not increase the lifeline emergency funding that has largely funded depositors’ withdrawals from Greek banks.
“Given these developments, banks in Greece will be closed through the week. The Greek referendum to be held July 5th will be a pivotal risk moment. Our base case remains that the European authorities will make every effort to minimize contagion and that the impact on other European financial markets, beyond short-term sentiment driven markdowns, is limited.”