London Market: Latin crisis weighs down on shares
Sunday 17 January 1999
Debenhams and Arcadia are set to join Marks & Spencer, Storehouse and Argos in reporting a drop in sales during the Christmas period. These statements are likely to be backed up by December sales figures due for release on Wednesday. "I would continue to avoid that sector for the moment," said Graham Wood, head of equities at Standard Life Assurance. "It's not just the unusual behaviour of the consumer but oversupply as well."
The FT-SE 100 index fell 3.4 per cent last week, falling four days out of five, although it rose 2.08 per cent to 5,941.0 on Friday. Banks and retailers led the declines.
Diageo may slip as it could warn of slowing sales in Latin America. "It's going to be downbeat on Latin America," said Stuart Forshaw at Charterhouse Tilney.
Lloyds TSB could lead banks lower, extending an 11 per cent drop last week. The bank has offices in Brazil, Argentina and other Latin American countries and was hurt after Brazil allowed its currency to devalue. The threat of recession in Brazil means that banks could be saddled with bad debts from companies in the region.
"What the markets are worried about is whether you get large-scale default on what they owe, which threatens financial institutions," said Mr Wood. Among other banks, National Westminster fell 11.6 per cent, Standard Chartered 9 per cent and HSBC 4 per cent.
Gilts are expected to rise as hopes for further interest rate cuts are bolstered by a series of economic reports including figures for inflation, retail sales and fourth-quarter gross domestic product, and the minutes of the Bank of England meeting earlier this month, when rates were cut.
"Overall the reports should underline the case for further easing," said Adam Chester, a treasury economist at Halifax. "The MPC minutes are the most important. I expect they will confirm the bank is poised to cut rates again in February."
The benchmark 9 per cent 10-year gilt yield rose on Friday to 4.28 per cent as stocks rallied when Brazil allowed its currency to float freely. Earlier in the week bonds had gained as stocks fell on concern about Brazil, and analysts expect bonds to continue to fluctuate in opposition to stocks this week.
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 3 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 4 April Fools' Day 2015: The best hoax news stories from around the internet
- 5 Gamers confess the worst things they've done in The Sims
University of Cambridge: Remains of 1,300 scholars are found under building
April Fools' Day 2015: The best hoax news stories from around the internet
April Fools' Day 2015 live: The best pranks and fake stories from around the world
Turkey power cut: Prime Minister says nationwide blackout could be caused by terrorists
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...