FTSE deep into the red on Greece worries

The FTSE 100 index has fallen sharply this morning as investors fretted over the implications of a rebound in the price of crude oil and the lack of progress in Greeces talks with its creditors.

FTSE deep into the red on Greece worries

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By late morning the index had fallen 88 points, or 1.26%. The position of the European Central Bank and its president Mario Draghi seemed to harden with public comments made by Draghi yesterday.

With the Syriza government seemingly unwilling or unable to cede further ground in negotiations the prospect of a messy Greek exit from the euro appears to have come a step closer.

The market has also been spooked by a 6% rise in the crude oil price, brought about largely by airstrikes on Yemen by a Saudi Arabian regime fearful of the recent gains made by militants in its neighbouring country. The West Texas Intermediate price is up to $51 while the Brent price rose to $59.

“Athens has pledged to draft a set of reforms but we have yet to see any action, and this is fuelling the selloff in London and the eurozone,” said IG markets analyst David Madden. “The Greek government has a history of saying one thing and doing another, and the market is becoming more impatient.”

Madden also expects US markets to fall with the Dow Jones forecast to open 140 points lower at 17,578, with US index futures feeling the fallout of the declining European markets. 

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