London’s blue chip stocks took another pounding today despite better than expected data.
Sterling edged higher as British mortgage approvals jumped and optimism among construction firms hit a nine-year high in May.
Markit/CIPS UK Construction Purchasing Managers’ Index registered 55.9 in May, beating forecasts and far above the growth-indicating 50 mark.
In Europe, Paris’ index CAC 40 was flat at 5,022 while the Frankfurt-based DAX eased 63 points to 11,372.
The likelihood that Greece will default on its next International Monetary Fund (IMF) payment is worrying investors with US$334mln due by Friday.
Crisis talks held by Eurozone ministers last night including European Central Bank president Mario Draghi and German chancellor Angela Merkel took place to deal with the issue.
Meanwhile, Alexis Tsipras, the Greek Prime Minister, sent a new proposal for them to mull over… this morning.
All eyes will be on how the US responds to moderate gains made yesterday. With two hours before the open, the Dow Jones is expected to drop by more than 100 points.
Back in the UK, the FTSE 100 was 30 points, or 0.5%, lower at lunch to 6,920.
Leading the fallers was British American Tobacco (LON:BATS) after details of a Canadian court ruling that awarded more than C$15bn in damages to Quebec smokers were revealed.
The judgement follows a ten year legal challenge against British American Tobacco's Canadian subsidiary, Imperial Tobacco Canada as well as two others.
The company said there are “strong legal grounds with which to challenge the judgement”. Shares eased 2.4% to 3,505p.
Meanwhile, Tesco (LON:TSCO) took a knock as a report from Kantar Worldpanel showed that after an improved start to the year Tesco sales decreased by 1.3%, with its market share falling by 0.4 percentage points to 28.6% in the 12 weeks to 24 May. Shares eased 1.6% to 206p.
On a more positive note, Morrisons (LON:MRW) was the only one of the big four supermarkets to experience growth in the period.
It eked out a 0.1% growth in sales while its market share remained constant at 10.9%. Shares rose almost 1% to 170p.
Meanwhile, plumbers' merchant Wolseley (LON:WOS) led the risers on the index after it recorded a 16.6% rise in third quarter revenue.
Profits also rose by 20% and the figures sent shares 2% higher to 4,100p.
In small caps, Redx Pharma (LON:REDX) has unveiled a potential breakthrough in the fight against antibiotic resistant infections.
This morning it said it had reached the pre-clinical development phase with a potential combatant for MRSA. Shares jumped 9% to 112p.
On the other side of the coin, software group SeaEnergy (LON:SEA) slumped as it warned the weakness of the oil price had affected its North Sea operation. Shares dropped 28% to 14p on the news making it the day’s biggest faller.