London’s stocks rallied ahead of the first Conservative Party Budget for twenty years, but the market’s attention was gain drawn by the chaos unfolding in China and Greece.
Footsie was 22 points higher at 6,454 despite another torrid night for shares in Asia and more uncertainty over Greece.
A summit last night between European leaders broke up with no deal agreed and a new deadline of Sunday was set for the Greeks to come up with proposals acceptable to its creditors.
Alexis Tsipras, Greece’s PM, said he foresaw a solution by the end of the week but without a deal, Greece’s banks are forecast to run out of cash within days.
Greece’s problems may be small beer soon to judge from where China’s markets are heading.
China and Hong Kong shares crashed as measures taken by the Chinese authorities to shore up its crumbling stock exchanges had little impact.
More than 50% of Chinese shares, 1,267 to be precise, are now suspended due to the recent sell-off, which has wiped trillions off the value of markets in Shanghai and.
China’s currency, the yuan, also tumbled to a four-year low against the dollar.
The turmoil threatened to overshadow Chancellor George Osborne's first post-election Budget.
How exactly he intends to cut £12bn of welfare spending will make the headlines, though the detail is likely to come more in the autumn.
It is thought likely he will raise the threshold for paying the higher 40% rate of income tax to £50,000. He starts talking at 12.30pm.
In what some might suggest was a cynical piece of timing on Budget Day, Barclays (LON:BARC) ousted Antony Jenkins its chief executive for the past three years.
“New leadership is required to accelerate the pace of execution going forward,” it said with chairman John McFarlane to be an executive until a replacement is found.
Markets weren’t that unhappy with the move with Barclays shares rising by 3% to 260.3p.
Other notable risers included Tesco (LON:TSCO) on reports of more interest in its for sale Asian operations. Shares rose 1.4% to 203.4p.
SSE (LON:SSE) rallied after the report by CMA yesterday on the energy supply industry stopped short of recommending breaking up the big companies. Shares rose 26p to 1,567p.
Companies with exposure to Asian markets were the big losers. HSBC (LON;HSBA), Standard Chartered (LON:STAN) and Prudential (LON:PRU) were all heavily marked down.
Elsewhere, Independent Oil & Gas (LON:IOG) rose 19% to 17.85p on news of a possible investment for a 29.9% stake for £7.1mln.
Fevertree Drinks (LON:FEVR) rose 10% to 319p. The fizzy mixers maker had a strong first half to the year with June a particularly good month.