UK Market Wrap
Global stock markets tank…again…
Well another day of huge movements in the global markets, this time pretty much everything was down, except the US dollar!
Markets across Asia, Australia, North America and Europe all plunged. Here in sunny Britain, the FTSE 100 tanked 188 points, or 4.5% to 4040 -still off last week’s low point, but not by much, and thanks to another grim day on Wall Street, the UK markets are in for another beating tomorrow morning. The Dow Jones Industrial Average fell sharply, closing down 5.7% to 8519, the S&P 500 fell even further, off 6.1% to 896, and the NASDAQ took a hit.
The FTSE 100’s heavy weighting towards natural resources continued to take its toll, after commodity prices plunged as the US dollar surged against the Euro and Sterling on further interest rate cut expectations, combined with continued fears that global demand for raw materials is set to slow sharply.
Copper fell 7% to $1.86/lb and Gold fell 4.3% to $735/ounce, Crude also dropped sharply, down 7% to $67/barrel. Severe corrections in nickel, zinc and lead in particular are starting to take their toll, with several small cap miners putting mines onto care & administration or ceasing mine developments. If copper follows a similar path, and moves below $1.50/pound, a number of copper mines will also face closure or will not move into development.
London’s large constituent of copper mines fell hard. First Quantum Mining (LSE: FQM) lost 12%, Kazakhmys (LSE: KAZ) plunged 15.5%, Antofagasta (LSE: ANTO) dropped 9% and Vedanta (LSE: VED) fell 13%.
The bigger diversified miners didn’t fare any better. Xstrata (LSE: XTA) plunged almost 14%, Anglo American (LSE: AAL), Rio Tinto (LSE: RIO) and BHP Billiton (LSE: BLT) all lost between 6-9% on the day.
Equally hard hit were precious metals, as silver, gold and palladium and platinum prices all pulled back on dollar strength. Silver producer Fresnillo (LSE: FRES) continued its abysmal run, falling almost 15% to 136 pence, while Russian gold producer, Peter Hambro Mining (LSE: POG) plunged almost 19% to 278 pence.
Oil and Gas constituents fared better than mining stocks, but still had a bad day. BP (LSE: BP), Shell (LSE: RDSB), Cairn Energy (LSE: CNE), Dana Petroleum (LSE: DANA) all fell 2.5-5.5% on the day.
Financials continued their awful run, Halifax Bank of Scotland (LSE: HBOS) lost almost 10%, Barclays (LSE: BARC) dropped 7.4%, Standard Chartered (LSE: STAN) fell around 9%, but Lloyds TSB (LSE: LLOY) and HSBC (LSE: HSBA) only fell less than 2%.
Retailers, Hospitality Groups and just about everything else fell too. The only real exception was pharmaceuticals, which finished in the blue. AstraZeneca (LSE: AZN) and GlaxoSmithKline (LSE: GSK) both climbed.
British Airways (LSE: BAY) also rallied on the continued weakening of oil prices.
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