G8 rhetoric focuses on “jobs and growth“
With little in the way of global economic data today, markets appeared to be in consolidation mode following the heavy selling last week. A Group of 8 meeting in Washington was the highlight from the weekend and whilst there was unsurprisingly no decisive action, the market welcomed commitments to focus on “growth and jobs”. There was also verbal support for Greece remaining in the eurozone from the leaders, and polls over the weekend showed growing support for the centre-right pro-bailout New Democracy.
Combined with the significant falls experienced in the last few weeks, financial markets stabilised today with modest gains seen in most risk assets. It was perhaps unsurprising that the mining sector, which has lost around 30% since the highs seen in February, was subject to the most bargain hunting. The Bank of England’s Michael Cohrs suggestions that UK banks would be able to withstand a Greek exit from the eurozone added some support to another beaten up sector. Royal Bank of Scotland was one of the biggest gainers, up 4% by the close at 20.8p.
Man group was one of the biggest gainers on the index, after it announced it is to acquire Financial Risk Management, a fund of hedge funds, for £142m. The deal will help support what has been a dwindling asset base for Man, and help diversify away from the AHL fund that has performed poorly in the volatile markets of the last few years. Commentators suggested that the price tag was low given the $8 billion of assets acquired; with investors concurring that is was a good deal as shares finished 4.7% higher at 78.8p.
European equity markets finished the day around 1% higher, the UK’s FTSE 100 among them closing up 0.7% at 5304. There were no major moves in commodity or currency markets, with Brent crude 0.4% higher at $107/bbl and gold marginally lower at $1579.
This was posted in Bdaily's Members' News section by James .