Overview: global stock markets got toppled by the disappointing consumer confidence update that came out in the US on Friday. Reuters and the University of Michigan revealed their consumer confidence index fell to 70.6 in October from 73.5 in September, which, despite a positive Chicago PMI update released earlier in the day, caused a massive sell-off on Wall Street, which brought the Dow Jones average down 2.5% to wipe out all of its Thursday’s gains.
The S&P 500 index lost 2.8%, while technology focused Nasdaq composite also declined 2.5%.
The bearish session on Wall Street strengthened the US dollar as oil and metal prices continued their decline.
December Brent Crude slipped to $75.46/barrel, while US light, sweet crude for December delivery slid to $77.27/barrel.
Gold recouped some of its recent losses, but was still above $1,050, sitting at $1,044/oz. Silver also inched slightly higher following last week’s freefall, climbing back to $16.38/oz. Platinum declined to $1,322/oz.
Base metals have also been able to stage a slight recovery with Copper rising to $2.97/pound and Nickel improving to $8.29/pound. Zinc dropped to $0.97/pound.
Asian markets also were in selling mode today with Hong Kong’s Hang Seng inching 1.7% lower, while China’s Shanghai composite index fell 2% and Japan’s Nikkei lost 2.3%.
Despite the fall in the consumer sentiment in the US, the British Retail Consortium reported yesterday that the consumer confidence index in the UK had risen to 75, its highest in 18 months.
However, the FTSE 100 is still seen opening 20 to 25 points lower on Monday in response to the losses on Wall Street and other stock markets.
Investors will be waiting for more data to come out in the US, where the ISM report for October and September construction numbers are due to be released today.
Morning news wrap
In the FTSE 100, gold miner Randgold Resources (LSE: RRS) and its joint venture partner AngloGold Ashanti said they agreed to acquire an additional 20% stake in the Moto gold project, now renamed Kibali, for US$113.6 million, which will give the two companies a total 90% interest in the project.
In the FTSE 250, datacentre provider Telecity Group (LSE: TCY) said trading remained strong and revenue growth continued to be in line with management’s expectations, while its current expansion programme also was on track.
Supplier of secure power systems Chloride Group (LSE: CHLD) said its pre-tax profits for the first half declined 41% to £10.4 million, while earnings per share slid 16% to 4.3 pence.
In the AIM, mobile email and data synchronisation group Synchronica PLC (AIM: SYNC) reported another contract win, this time a US$270,000 deal with a southern African operator for an initial 100,000 user license for its mobile product Mobile Gateway. Synchronica said market penetration of mobile phones in Africa has now reached 37% and was expected to rise to more than 60% in 2012.
Kazakhstan operating Max Petroleum (LSE: MXP) said drilling has commenced on the ZMA-AN2 development well in the Zhana Makat Field in its blocks A&E license area in Kazakhstan.
Europe focused oil and gas developer Ascent Resources (AIM: AST) said it has completed the drilling of the PEN-104 sidetracked gas well in the Nyirseg permits of Eastern Hungary.