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FTSE100 closes 1.93% down as US shares tank

FTSE100 finished Friday 114 points lower with miners taking a pummelling and US markets on the slide again.
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The Footsie closed almost 2% lower on Friday...

FTSE100 finished Friday 114 points lower with miners taking a pummelling and US markets on the slide again.

The UK benchmark closed down 1.93% down at 5,804.

On Wall Street, the Dow Jones was 387 lower at  15,994, the S&P500 was 45 down at 1,876 and the tech heavy Nasdaq was 146 points lower at 4,468 as energy stocks took a hit, as US crude slumped over 5% to US$29.62 a barrel.

Putting investors off is the worry over China, which saw a sell-off last night and the oil price.

Chris Beauchamp, at IG Index, said: "Much of the  damage today in London has been wrought by miners, who have sold off a day after surging; what is becoming clear is that every ‘up’ day for their share prices is the cue for more embattled investors to sell, providing yet more downward pressure."

Anglo American (LON:AAL) was the big loser after yesterday's 13% gain, dropping 11.49% to 232.75p. Commodities giant Glencore (LON:GLEN) lost 6.51% to stand at 73.50p.

In the small cap world, Sierra Rutile (LON:SRX) was a big gainer, adding 12% to 17.50p as it achieved another production record as output in its latest quarter rose by 25% compared to a year ago.

The Sierra Leone-based mineral sands miner produced 38,787 tonnes of rutile and 10,484 tonnes of ilmenite in the three months to December even though it deliberately slowed production in the final month to avoid holding excess working capital.

 European Metals (LON:EMH)shares ended unchanged having been higher earlier as drill results from Cinovec surpassed company’s expectations and confirm that the lithium mineralisation is robust and continuous.

Forbidden Technologies (LON:FBT) was up over 8% to 11.75p after two new ABC network affiliates will be adopting its cloud-based video platform Forscene.

Conversely, Orosur Mining (LON:OMI) lost 14% to 5.25p after results yesterday showed lower second quarter revenues though losses were reduced and gold miner expects continuing improvement as costs fall.

 

London’s blue-chip stocks continued their way lower throughout the morning session as last night’s Chinese selloff impacted markets across Europe.

Once again seen the Asian powerhouse move back into bear market territory for the second time in just over six months. 

Alastair McCaig at IG said: “The last couple of days might have seen the FTSE flirting with the idea of breaking back above 6000, but this morning’s actions look to have cooled any hopes of that.”

The FTSE100 was around 1.5% lower, or 86 points, at 5,831 by lunch, with miners at the bottom of the index.

BHP Billiton (LON:BLT) was the third biggest faller of the day after analysts warned it could slash its dividend after taking a US$7.2bn write-down on its shale gas interests in the US.

Barclays’ broking arm expects BHP Billiton will be forced to halve its dividend due to the slump in commodity prices. Shares in the miner lost around 6.5% to 614p.

Anglo American (LON:AAL), down 9% to 238p and Glencore (LON:GLEN), which fell 7.7% to 72p, were the biggest losers by lunch.

Oil stocks were also struggling as the price of a barrel of Brent crude dropped 3.6% to US$29.80, while the West Texas Intermediate price spilled 4.9% to US$29.73.

Royal Dutch Shell (LON:RDSB) spilled 2.7%, or 38p, to 1,351p, while BP (LON:BP.) lost 2.5%, or 8p, to 339p.

In the small cap world, European Metals (LON:EMH) was the day’s biggest gainer.

The firm roe 35% to 9.13p as drill results from Cinovec surpassed company’s expectations and confirm that the lithium mineralisation is robust and continuous. 

Also higher was Sierra Rutile (LON:SRX) up 14% to 17.9p, after it reported record rutile production in latest quarter with further boost to come in 2016.

Completing the trio of big gainers was Forbidden Technologies (LON:FBT), up 7% to 11.7p, after two new ABC network affiliates will be adopting its cloud-based video platform Forscene.

Conversely, Orosur Mining (LON:OMI) lost 14% to 5.25p after results yesterday showed lower second quarter revenues though losses were reduced and gold miner expects continuing improvement as costs fall.

MORNING REPORT

The UK’s main index started the final day of the week lower as a slumping oil price took its toll.

Reports suggest beleaguered oil companies could be hit with further headwinds if Iran ups its oil output.

Millions of extra barrels of Iranian crude oil could begin spilling on to world markets next week, adding further to fierce downward pressure on prices, the paper writes.

The news had an adverse effect on the oil price, with a barrel of Brent crude slipping 3.4% to US$29.86 while the West Texas Intermediate price dropped 5% to US$29.71.

Royal Dutch Shell (LON:RDSB) spilled 2.6%, or 38p, to 1,352p, while BP (LON:BP.) lost 2.4%, or 8p, to 339p.

The miners took their customary place at the foot of the index, however, as Asian markets struggled overnight.

Bernard Aw, at spread-betting firm IG, said: “Asia is likely to end the week with better risk appetite than when it started, although the mixed performance from the overnight markets suggests that any risk uptake today may be restrained.”

Anglo American (LON:AAL) lost around 10% to 236p while Glencore (LON:GLEN), BHP Billiton (LON:BLT), Antofagasta (LON:ANT) and Rio Tinto (LON:RIO) rounded out the top five fallers.

Speaking of mining and resources giant BHP Billiton, the firm is being tipped to slash its dividend after taking a US$7.2bn write-down on its shale gas interests in the US.

Away from the index, Moneysupermarket (LON:MONY) disappointed the market on Friday despite reporting that sales and revenues will be slightly ahead of expectations.

Investors were worried by its insurance business, which “contracted slightly more than expected” in the fourth quarter, by around 10%, meaning, for the year to December, it is only 2% ahead of the previous year. Shares dropped around 9%, or 31p, in early deals to 320p.

It wasn’t all doom and gloom, however, as Housebuilder Bovis Homes (LON:BVS) expects record profits and a big hike in revenue for 2015.Shares climbed around 3% to 952p in early deals on Friday.

In the small cap space, Video editing firm Forbidden Technologies (LON:FBT) announced that two new ABC network affiliates will be adopting its cloud-based video platform Forscene. Shares climbed around 7% to 11p.

Conversely, technology group eg solutions (LON:EGS) said it returned to profit in the second half of the financial year as it updated on recent trading.

Revenues were lower, however, and shares eased 11% to 48p.

MARKET PREVIEW

London’s blue-chip stocks are expected to open lower again on Friday as Asian markets took a tumble overnight.

The Shanghai Composite made a triple digit loss, down 109 points to 2,889, while the Hang Seng lost more than one per cent and the Nikkei 225 eased half a per cent.

Bernard Aw, at spread-betting firm IG, said: “Asia is likely to end the week with better risk appetite than when it started, although the mixed performance from the overnight markets suggests that any risk uptake today may be restrained.”

The FTSE100 is expected to follow this trend, sliding to around 5,912

On the corporate front, Friday’s trading session follows four days of ups and downs for London-listed retailers and their shareholders.

Credit expert Experian (LON:EXPN) would probably stress the importance of budgeting in and around the festive period.

Its own finances will be under scrutiny tomorrow when the firm sends out a trading update.

Not much else in the way of company announcements, although there’s US data to look out for.

Stats will tell us how much the manufacturing sector is acting as a dampener on US economic activity (industrial production data for December) and how far the US consumer is offsetting this (retail sales for December), both released on Friday.

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