FTSE slips as Greece staves off default

Britain’s FTSE wavered following the Greek bailout deal as investors considered the long-term structural reforms needed to stabilise the country’s finances.

The benchmark UK index of blue-chip shares slipped 0.29%, or 17 points, to 5,928 and the Mid-250 index slid 0.36%, or 40 points, to 11,380.

Vedanta Resources (VED.L) topped the FTSE 100 index to take on 95p, or 7%, to £14.53 as the India-focused mining company announced plans to restructure its business.

The move may result in a merger of two of its subsidiary companies, Steralite Industries and Sesa Goa. See the FTSE’s performance and the market’s top winners and losers.

Greece may need further support

Investors across Europe mulled the €130 billion bailout granted to Greece from the European Union and International Monetary Fund (IMF).

Although the deal drew a line under months of speculation that Greece would default on its debt repayments, investors were still unconvinced that the move would truly stabilise the country’s finances in the long term.

Dominic Rossi, global chief investment officer at Fidelity Worldwide Investment, said: ‘After months of wrangling about the second bailout, and on the day of its announcement, we now discover we may need a third bailout.

‘The resolution to the Greek problem still eludes European finance ministers despite the amount of public money being made available to Greece. My view remains that at some stage Greece will voluntarily default and leave the euro.’

Other stock markets in Europe also fell, as Greece was guaranteed its second bailout: Germany’s DAX index dropped 0.49% to 6,914, France's CAC 40 index shed 0.14% to 3,468, and the FTSEurofirst 300 index of top European shares fell back 0.46% to 1,086.

Stateside markets opened after Washington Day on Monday to embrace the news, with the Dow Jones breaking above 13,000 points to reach levels not seen since May 2008.

The Dow Jones Industrial Average increased 0.27% to 12,985, the Standard & Poor's 500 index strengthened 0.4% to 1,366, and the Nasdaq Composite index took on 0.31% to 2,961.

Sterling shed 0.35% against the dollar to $1.5795, and weakened 0.43% against the euro to €1.1915.

Brent crude for delivery in next month rose 0.48% to $120.63 per barrel and West Texas Intermediate crude for next month delivery took on 1.62% to $104.91.

Admiral rises on upgrade

Insurer Admiral Group (ADML.L) jumped up 32p, or 3.2%, to £10.43 as analysts at Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’. Its full-year results are expected on March 7.

Kenmare Resources (JEV.L), which is a member of Citywire Top Stocks®, added 5.1p, or 9%, to 61.5p and oil services company Hunting (HTG.L) increased 13.5p, or 1.7%, to 793p.

A host of miners and oil firms reversed Monday’s fortunes to lead the FTSE’s losses; Evraz (EVRZ.L) dropped 19.7p, or 4.5%, to 412.7p; Tullow (TLW.L) fell 58p, or 3.6% to £15.43; and Polymetal (POLYP.L) shed 39p, or 3.6%, to £10.45.

Chipmaker CSR (CSR.L) also weakened 14.1p, or 5.1%, to 260.9p following its strong performance on Monday on the back of its fourth-quarter results.

Analysts at Barclays, UBS, JP Morgan and Natixis raised their target price on the stock. However, Numis and Canaccord Genuity cut their position on the stock from ‘buy’ to ‘hold’.