Greece’s prediction that it would miss a deficit target despite more austerity measures helped London’s blue-chips begin the last three months of the year in the red and traders were talking of “Groundhog day” on the bourse.
Concerns around Greece’s teetering finances and prospects for global growth meant there was a strong sense of deja vu as banks and mining stocks once again led the index lower. Vedanta Resources was the sharpest faller, sliding 91p to £10.10 while fellow miner, Xstrata shed 29.9 to 790.9p. High street lenders, Royal Bank of Scotland and Lloyds Banking Group dropped 1.03 to 22.46p and 1.41 to 33.46p respectively.
Morgan Stanley was taking no chances on the miners, reducing its earnings predictions to reflect a lowering of price forecasts by the broker’s commodities team.
“Rising risks of a developed market recession and deteriorating prospects of global growth have prompted our commodities team to revise house price forecasts. We have reduced our base metals estimates by an average of 16pc, and kept our iron ore prices unchanged,” said Morgan Stanley. “Notably, we upgraded gold and silver prices to reflect strong safe-haven demand for both metals.”
THE TELEGRAPH
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