Market Report: Footsie waits it out for Greek election

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The Independent Online

It's a tricky time to go long on the market. That's the view of one Richard Perry, a strategist at Central Markets, offering a common position. And as long as that's the consensus, the FTSE 100 is unlikely to gain traction. Yesterday was another nothing day. It drifted up early on, then down a little — hundreds of pounds were wiped on and off.

London's main index finished up 10 points at 5483.81 on some seriously dreary volumes.

"A waiting game until the Greek elections are over", said one trader. "We're in limbo, no one wants to be the wrong side of this once we have a result," said another. "The market is dead."

"There simply is no secondary market," said a City old timer eyeing his revenue stream. That's an exaggeration, but not much of one.

The move by CVC to delay its flotation of Formula One suggests there isn't much of a primary market either. Hand-sitting, with the odd dabble out of boredom, is still the favoured strategy until there's some clarity out there.

Markus Huber at ETX Capital offers this as context. "Worries about the outcome of Greek elections on Sunday are being counterbalanced by optimism that several major central banks around the world will soon intervene into the markets, either by lowering rates or buying bonds," he said.

The pointy heads at Barclays were a bit more downbeat, noting: "We believe the risks from Europe will remain a key market driver for the foreseeable future.Greek elections over the weekend are too close to call, and the potential for a negative risk event remains considerable. A weaker economic picture, limited policy intervention and elevated uncertainty mean that the pressure on risky assets remains."

Even some companies that appear to be doing well are seeing their stock shunned. Sainsbury's yesterday reported sales up 3.6% in the 12 weeks to 9 June, but the shares were still hammered nearly 3 per cent, down 7.6p at 282p.

Clive Black at Shore Capital said: "The UK food retailing sector is understandably out of favour at present, reflecting the tough, consumer economy manifested in falling volumes and compressed margins. Sainsbury is girding its loins for whatever a self-improving Tesco UK can throw at it by way of competitive pressure."

The eurozone markets were also drifting. Michael Hewson at CMC Markets said: "Fragmented is an apt description of what European markets have been today, as equities chopped between positive and negative territory throughout the day.

US economic data didn't provide much of a catalyst either way. Among sthe bright spots has been the Spanish IBEX, largely because its largest company by market cap, Inditex, owner of the Zara clothes chain, posted much better than expected profits for Q1.

A UBS upgrade for insurer Resolution helped financial stocks in general. Jupiter ticked up 5.8p to 206.7p, while Royal Bank of Scotland moved smartly up 3.9p to 225.9p before profit takers took advantage, forcing it down 0.4p at 221.6p on the day.

Resolution was the best riser early doors, dragging the Prudential and Legal & General with it, but later had to be content with a still decent rise of 2.3p to 197.6p.

Engineer IMI had a rough day after Swedish manufacturing group SKF warned of a second-quarter slowdown which hit shares in companies throughout the industrials sector. It fell 25p to 844.5p. Also heading down were WPP and Burberry, two companies that have recently awarded their chief executives with fabulous pay packages on the basis of how much they have done for shareholders. Those shareholders were a bit worse off yesterday, with WPP down 8.62p at 759.38 and Burberry out of fashion down 29p to 1341p.

Over in America, JP Morgan boss Jamie Dimon was insisting that there was good intent in the "London Whale" trades that lost the bank $2bn (£1.28bn) and counting. At least half of the City knows exactly what he means.