Italian turmoil takes its toll on UK stocks

Market report Scott Reid

Some £25 billion was wiped off leading UK stocks after Italy’s political turmoil sparked a downturn in European markets.

London’s benchmark FTSE 100 ended the day down 1.2 per cent or 97.64 points at 7,632.64, while its continental peers were also hit by a sea of red with the French Cac 40 and German Dax down 1.2 per cent and 1.5 per cent, respectively. The Italian market slid 2.6 per cent.

David Madden, market analyst at CMC Markets UK, said politics had “cast a shadow over equities”.

He noted: “Political turmoil in Italy and Spain has rocked investor sentiment in Europe. Carlo Cotarelli will act as interim Italian prime minister to steady the ship, but we are likely to see a general election at the back end of this year or in early 2019.

“The rise of anti-euro sentiment in Italy is the driving force behind the sell-off.”

In UK stocks, Standard Life Aberdeen fell 9.1p to 350.8p despite confirming that it would return up to £1.75 billion to shareholders following the sale of its European insurance business to Phoenix Group.

Dixons Carphone was at the bottom of the FTSE 250 as the company warned on profits and revealed plans to close 92 stores.

The group said that full-year pre-tax profit is expected to come in at £382 million, down from £501m in 2017. Next year the figure will fall to £300m, the firm added. Shares fell 48.4p to 185p.

An official Footsie reshuffle announcement was due to be made today but it looked as if embattled Marks & Spencer may have survived the top-flight drop by the skin of its teeth. Regus owner IWG has rejected a fifth takeover approach for the business, turning down a cash offer from US investor Prime Opportunities. Shares tumbled after the electricals retailer updated the market on its recent trading and warned that profits would continue to fall.