logo-loader

Miners and Morrisons drag down London market

Published: 09:50 05 Nov 2015 GMT

Cityoflondon

Shares started Thursday on the back foot following a downbeat trading update from Morrisons and a fall in mining stocks.

The FTSE 100 Index was 27.26 points off at 6385 and Germany's Dax declined 11 points, although France's CAC-40 was eight points up.

Morrisons (LON:MRW) fell 5.9p or 3.3% to 171.6p after the supermarket chain reported another fall in sales in the third quarter.

After a stellar performance on Wednesday, miners were down in the dumps again.

Anglo American (LON:AAL) backtracked 22.3p to 556.8p, BHP Billiton (LON:BLT) was 15.5p off at 1054p and Rio Tinto (LON:RIO) subsided 37p to 2333.5p.

On the economic front, the market was waiting for the Bank of England's monthly interest rate decision.

Rates are unlikely to change but economists will be watching to see whether more members of the Bank's monetary policy committee called for a hike at last month's meeting.

Back in the market, rat-catching company Rentokil Initial (LON:RTO) was flat at 155.1p as it boosted third quarter revenue but said mainland European trading was tough.

AstraZeneca (LON:AZN) was 123.5p healthier at 4251p after it upped revenue and earnings guidance for 2015. But it said 2016 would be challenging due to loss of exclusivity on cholesterol treatment Crestor in the US.

News of significant progress with an operational review drove up shares in electronic component group APC Technology (LON:APC) by 0.38p to 7.75p.

Oracle Coalfields (LON:ORCP) soared 0.25p to 2.42p as the developer of a combined lignite mineral resource and mine mouth power plant in the south-east of Sindh Province, Pakistan, received a letter of no objection from the Central Power Purchasing Agency Guarantee for the project.

Anglo Pacific Group (LON:APF) got a 1.25p boost to 73.75p after the natural resources royalty group welcomed positive findings of a pre-feasibility study at Berkeley Energy’s (LON:BKY) Salamanca uranium project in Spain. Berkeley's shares dropped 2.75p to 26.5p.

MARKET PREVIEW

It’s a busy week for Fed watchers and second guessers.

Yesterday brought Janet Yellen’s sit-down with the US Congress, where she provided hawkish sound bites including that a December interest rate rise was “a live possibility”.

New York Fed president William Dudley, also at Congress, agreed with the Fed chairwoman.

There was also the lesser of two job reports, stats from US private employers, which exceeded expectations. It puts yet more emphasis on tomorrow’s non-farm payroll data for October.

The health of the US jobs market has thus far been a decisive economic factor in the Fed’s thinking on interest rates, and with heightened expectations of a rate rise next month attention will be influential stats.

It all helped put the brakes on Wall Street’s recent rally, and it appears that traders may be starting to price in the ‘live possibility’ of higher interest rates before the end of the year.

The Dow Jones ended Wednesday some 50 points, 0.3%, lower at 17,867, while the S&P 500 was 0.35% lower closing at 2,102, though the Nasdaq was mostly flat at 5,142.

In Asia equity markets were mostly stronger. Japan’s Nikkei rose 190 points, about 1%, to 19,116 while the Shanghai Composite gained more, up 2.2% at 3,534. Hong Kong’s Hang Seng, meanwhile, was flat at 23,051.

Australia’s ASX 200 weakened, losing about 1%, to 5,193.

Here in the UK we too have central bank news. Bank of England governor Mark Carney’s ‘Super Thursday’ has come around again and today the central banker will reveal an interest rate decision, last month’s meeting minutes and a quarterly inflation report, as well as giving a speech.

“There may currently be some confusion in the markets around the timing of the first rate hike from the BoE, but after today’s events things should hopefully be much clearer,” said Craig Erlam, analyst at foreign exchange trading firm OANDA.

Amid so much macro-distraction it is little wonder the pre-market indicates investors will start the day on the fence.

The FTSE 100 is expected to begin without much direction, with spread-betting firm IG calling the blue-chip benchmark about 5 points lower at 6,403 to 6,408.

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

1 hour, 55 minutes ago