Italian fears have investors spooked

THE FTSE 100 ended in the red on Tuesday as fears over the standoff between Italy and the EU spooked traders across Europe.

London’s premier index closed down 63.16 points, or 0.89 per cent, at 7,040.68.

David Madden, market analyst at CMC, said: “Stock markets in Europe are largely lower as investors remain nervous about the political standoff between Italy and the EU over the budget.

“The anti-establishment coalition in Rome wants to press ahead and boost spending, and in turn increase the budget deficit.

“Brussels has already rejected the proposal, and neither side want to back down. Fears persist that this could trigger another round of the eurozone debt crisis. The strained trading relationship between the US and China is souring sentiment too.”

In stocks, Morrisons ended near the bottom of the pile after seeing sales growth slow following the hot summer and World Cup.

Group like-for-like sales excluding fuel were up 5.6 per cent in the 13 weeks to November 4.

This was lower than the 6.3 per cent growth recorded in the previous quarter as the football and hot weather encouraged shoppers to stock up on food and drink.

Shares closed down 10.05p at 244.5p.

63 Point fall on the FTSE 100 market in

Italy yesterday

At the other end of the spectrum, Primark owner Associated British Foods (ABF) ended top of the index as investors looked past a 2.1 per cent decline in like-for-like sales at the budget clothing chain.

In the UK, like-for-like sales were up 1.2 per cent and Primark’s share of the total clothing market increased significantly amid a declining high street. Overall sales were 5.3 per cent ahead of last year.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “ABF continues to open up new stores, which given the challenges other bricks and mortar retailers are facing looks a bold move - but it’s working.

“Overall sales growth is continuing despite declining like-for-like sales, and a popular summer range means margins and profits continue to climb.”

ABF shares closed up 72p at 2,460p.

The pound, meanwhile, held on to earlier gains as hopes of a Brexit deal remain in sight.

The British currency was up 0.25 per cent versus the US dollar at 1.307. Against the euro, sterling was trading 0.2 per cent higher at 1.146.

In Europe, Germany’s DAX was down 0.09 per cent and France’s CAC fell 0.51 per cent.

A barrel of Brent Crude was trading at 71.4 US dollars, down 1.74 per cent.