Risk-off sentiment prevailed throughout Europe, as FTSE indices traded lower for the second consecutive day, with the primary index giving back gains intra-week. The sell-off was largely indiscriminate across sectors, aside from financials that were markedly culled from investor’s portfolios as investors tilted into fixed income positions – prompting UK gilt yields to hit record lows. The pessimism carried over into the US open, as both the S&P 500 and DJ Industrial Average were also a leg lower at the time of writing.
Financiers taking the hit included Prudential (-4.15%), Standard Chartered (-4.03%), Barclays (-3.92%) and Hargreaves Lansdown (-3.58%). While in the FTSE 250 a spectrum of companies including Hays(-6.52%), Countrywide (-6.10%), Ocado Group (-5.73%) and Restaurant Group(-5.69%) all sank lower.
The risk-off sentiment was accompanied for a rush to safe haven assets, as gold rallied from $1270/oz to $1272/oz.
It seems any optimism on a global perspective has vanished, as hopes of a earlier than expected June US Fed Funds rate rise were extinguished earlier in the week by Janet Yellen, following a much weaker than expected jobs report last week. As a result, Brexit worries have come to the fore in Investor’s minds as a major concern.
Tesco today announced that it has sold its 95.5% stake in Turkish supermarket chain Kipa as well as its UK restaurant chain Giraffe. The grocer divested out of the Turkish market, noting Kipa was a small regional player in a highly competitive market, removing the need for the sustained investment required to enable the business to compete independently. The company will instead focus on its proposition in Central Europe – improving profitability and striving to grow market share in South East Asia. Concurrently, 54 Giraffe restaurants are being sold to Boparan Restaurant Holdings, the owner of Harry Ramsden’s fish and chip restaurants.
At the close European indices were down with the FTSE 100 -1.86%, with the CAC 40 -2.21%, and the DAX 30 -2.51%.