Great Britain’s top share index FTSE fell by 1% on Tuesday on the back of the debt situation in the Europe and declining stocks of the major banks and mining commodities. Concerns over the debt situation has prompted investors to re-examine the equity holdings, and thus, making investors even more confused about their investment planning. Amid growing confusion, most investor sold their equities that were dependent on the recovery of the economy but the situation worsened after the major equities got sold, dragging the FTSE index down even further.
Shares of banks like Standard Chartered and HSBC fell respectively 2.1% and 0.9%. Ireland’s Anglo Irish bank’s recapitalization move exceeded 35 billion euros on Tuesday and analysts fear that this news can add up to the ongoing negative share trading. Shares of Lloyds Banking Group also dipped by 1.0% and Barclays was down by 0.3%
Meanwhile, Man group, a financial hedge fund marked biggest losses as their shares fell by 3.4% after their clients withdrew assets for an eighth quarter.
David Jones, a chief market strategist form IG Index said, "The jury's still out (on the prospects for global economic recovery), so that's what's making the moves more exaggerated than they would usually be."
Mining stocks also marked huge losses as the softening metal prices and weakening commodity prices weighed on the miners. Shares of Xstrata and Antofagasta dropped around 1.5%, while share of Vedanta Resources fell by 1.4% on Deutsche Bank’s undervaluation.
Energy stocks were dragged too as the crude oil was down over 1%.
Positive signs
According to the Office for National Statistics, the economy of the Great Britain has grown at a very past pace in nine years in FYQ2. Macro-economic data has also painted a relative better picture of the economy.
Phil Gillette, an experienced trader at Spreadex said, "If you look at the charts, it does still look like it is forming an upward channel, so whether this is a little blip with the market wearing bad days for a while ... but generally it looks well supported, although low volumes remain a concern."
