European markets started the day in blue, reacting to last night’s strong finish in the United States, but the good start was quickly eroded away by a soft start for the S&P 500, NASDAQ and Dow Jones this morning.
London`s FTSE 100 ended the day near its intraday low as investors on both sides of the pond remained cautious ahead of tomorrow`s US non-farm payrolls data and unemployment rate update.
Both the Bank of England and European Central Bank maintained ultra-low interest rates today, in line with expectations.
In London, the main movers on the day were insurance and financials. Insurance giant Aviva (LSE:AV) and RSA Insurance Group (LSE:RSA) lead the blue chip index with gains of 7% and 4.5% respectively. Asset manager Schroders (LSE:SDR) also did well, rising 3%, as did Lloyds (LSE:LLOY, NYSE:LYG), which rose 2.5%.
Medical devices manufacturer Smith & Nephew (LSE:SN, NYSE:SNN) also rose 2.5%.
Leading the decliners today was defence contractor Cobham (LSE:COB) which fell 6.6%, while diversified consumer products giant Unilever (LSE:ULVR, NYSE:UL) dropped 4.5. Other notable fallers included the world`s largest primary silver producer, Fresnillo (LSE:FRES) and African focused gold producer Randgold Resources (LSE:RRS, NYSE:GOLD) which both fell 4.5%.
Commodities
Oil prices declined in Europe under pressure from mixed US oil inventories data and a disappointing jobless claims update, which weighed down equity markets both in the US and Europe today.
Yesterday’s closely watched inventories report from Energy Information Administration (EIA) showed a decline of 2.8 million barrels in US crude stockpiles last week. However, gasoline inventories added 729,000 barrels and distillates, which include diesel and heating oil, increased by 2.2 million barrels. Total inventories of crude oil and oil products now stands at the highest level since 1990 at 1.125 billion barrels.
September Brent Crude moved down to US$81.46/barrel, while US light, sweet crude slipped to US$81.91/barrel on the New York Mercantile Exchange (NYMEX).
Gold keeps rising
Gold is looking to extend its winning streak to seven sessions today.
The yellow metals’ gains were minor, barely putting it above US$1,196/oz one day after testing support at US$1,200/oz on increased physical buying and optimism that China’s decision to loosen up its domestic gold market would lead to a rise in demand.
Heavy buying from Indian jewellers ahead of the festival season in that country coupled with continuingly strong demand from bargain hunters further bolstered gold.
Gold inched higher to US$1,196/oz. Silver followed, climbing to US$18.37/oz, while platinum declined to US$1,574/oz.