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Greek woes prompt FTSE’s worst month in three years

by: Investment Week
  • 01/07/2015
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Greek woes prompt FTSE’s worst month in three years
The FTSE 100 has opened 0.7% higher this morning after recording its worst monthly performance in three years in June.

The index opened up 45 points at 6,564, following on from a month in which it shed some 6.6%.

The June performance means the index dropped 0.7% in the first half of 2015 as a whole.

Much of last month’s fall has taken place since the start of this week: the blue chip index fell 3.5% between Friday’s close and Tuesday 30 June as Greece called a referendum on creditors’ bailout demands.

But Athens’ failure to meet the 30 June deadline for a €1.6bn IMF payment overnight – a move which puts it in ‘arrears’ if not marking an official default – failed to dent the index further this morning.

Greece missed the payment overnight after failing to secure a last-ditch bailout extension ahead of Sunday’s referendum. The latest set of Greek proposals are due to be discussed by eurozone finance ministers later today.

For UK investors, last month’s FTSE drop looks like a case of deja vu. It represented the worst performance since May 2012, when the index fell 7.2% on concerns over Greece’s ability to meet its debts and stay in the eurozone.

Part of the FTSE’s poor first half can be attributed to a different factor. Miners and energy stocks have dragged the index down as falling commodity prices and a slowdown in China take their toll.

This trend is underlined by the fact that the more domestic-focused FTSE 250 remains up 9% year-to-date, despite falling almost 4% last month.

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