Equities have begun the new week trading in the red with the FTSE handing back some of the gains seen during Friday’s session.
Despite England’s thumping world cup win yesterday, there has failed to be a boost in sentiment in the markets, with the FTSE lower by more than 70 points. The weakness is seemingly emanating from Europe with the German Dax 30 taking out last week’s low and looking susceptible to further declines. The pound is trading little changed on the day as it looks to firm up and gain traction above the 1.32 handle against the US dollar.
Countrywide shares plummet
There’s been a sharp move lower in Countrywide (LON:CWD) shares this morning, with the UK largest estate agent group plummeting over 25% after it announced plans to cut its debt by tapping investors for additional funds. The firm also delivered a profit warning, cautioning that earnings before interest, tax, depreciation and amortisation would be £20m lower in the first half of 2018 compared to the same period in the previous year.
Countrywide has blamed a subdued property market for the disappointing results and the latest move to slash its debt pile by more than half through raising additional equity has also contributed to the selling seen in the stock, which has fallen below 60p today to hit its lowest ever level.
Lira rallies as Erdogan claims victory
Sunday’s elections in Turkey have delivered a key victory for incumbent president Erdogan, as he looks to tighten his grip on power. The Turkish Lira appreciated in the initial reaction on the news with Erdogan securing 53% of the presidential vote.
The Lira has been one of the worst performing currencies in recent years, as a reluctance to tighten monetary policy despite rising levels of inflation has caused a major depreciation. Two separate rate hikes in recent months have raised hopes that finally the central bank is taking the appropriate steps to stem the declines, but there still remains elevated levels of uncertainty going forward. Erdogan is highly influential in determining the country’s monetary policy and his unorthodox standpoint with claims that higher rates lead to higher inflation has exacerbated the Lira’s demise. A sustained recovery may lie ahead for the Lira if Erdogan continues to preside over further tightening, but given his unpredictable nature this standpoint is far from certain.