FTSE 100 watch: Footsie dips amid Italian budget worries

RSA’s trading update weighs on insurers

FTSE 100 watch: Footsie dips amid Italian budget worries

The UK benchmark index has fallen into the last trading day of September, pressured by worries over Italy’s budget. Blue-chip insurers are also weighing on the FTSE 100, after RSA Insurance (LON:RSA) warned on profits.

FTSE 100 falls lower

As of 12:31 BST, the Footsie had given up 54.85 points to stand 0.73 percent lower at 7,490.59. Sentiment has been subdued in the last trading day of the quarter as Italy set a higher-than-expected budget deficit target, which, Reuters reports, could put the country on a collision course with Brussels.

“Since mid-2016, Italy has topped our list of home-grown risks in the eurozone,” Holger Schmieding, chief economist at Berenberg, commented, as quoted by the Guardian. “Because Italy’s underlying fundamentals are shaky, it may not take much to trigger a major selloff in Italian bond markets that would weaken banks, tighten financing conditions and dampen economic growth further.”

Individual stock news

At home, insurers have come under pressure as RSA revealed that its pre-tax profit for the year-to-date was lower on an underlying basis, with this year’s ‘Beast from the East’ having hit its UK business. The group’s shares are 9.37 percent down at 574.60p, while Direct Line (LON:DLG) and Aviva (LON:AV) have given up 2.63 percent and 2.11 percent, respectively.

Elsewhere on the FTSE 100, easyJet’s (LON:EZJ) is 2.64 percent down at 1,290.50p, despite forecasting that its annual profit will come at the top end of its guidance.

“Good numbers from easyJet, with profits for the full year seen at the top end of guidance, but doubts about 2019 have weighed on the stock this morning”, Neil Wilson, chief market analyst at Markets.com, told Reuters.

The FTSE 100 was 0.83 percent down at 7,483.11 points as of 12:46 BST on Friday, 28 September 2018.

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