London’s blue-chip stocks took a battering today as lower-than-expected US data put a spanner in the Federal Reserve’s decision to raise interest rates.
Connor Campbell at spread-betting firm Spreadex, said: “Whilst the headline figure, a non-farm payroll of 173k against the 215k expected, is at a glance a dovish number, the entire afternoon seems to have conspired against investors getting a clearer picture of whether a September rate-hike is on the cards or not.”
Though the non-farms missed expectations, there is a tendency for the August figure to be revised upwards in subsequent readings.
Indeed, both June and July were revised upwards, the former from 223k to 231k and the latter a big jump from 215k to 245k.
The news did little to excite investors, however. The Dow Jones opened almost 240 points lower at 16,138, while the tech heavy Nasdaq lost 45 points to head to 4,688 and the broader S&P500 index opened 25 points lower at 1,926.
Back on home soil, the FTSE 100 dropped more than 150 points, or 2.4%, to 6,042, dragged down by miners and oil stocks.
Mining stocks took the biggest hit, as all metal prices, except aluminium, fell.
Leading the way lower was Anglo American (LON:AAL), down 7.8% to 668p, followed by Glencore (LON:GLEN), which lost 6% to 123p and Antofagasta (LON:ANTO), which dropped 5.4% to 564p.
Away from the index it was a similar story, with Indian copper, aluminium and zinc miner Vedanta Resources (LON:VED) free-falling 12.4% to 511p.
Meanwhile, Brent crude fell 1.27% to US$50 while West Texas Intermediate (WTI) softened 1.3% to US$46.1. BP (LON:BP.) plummeted 5% to 334p while Shell (LON:RDSB) eased 3.3% to 1,611p.
On the corporate front, High Street bellwether Next (LON:NXT) suffered as the BDO High Street sales tracker survey for August showed the UK high street had its worst month since November 2008.
Poor weather was partly to blame, as British shoppers headed for warmer climates over the summer.
Just to add insult to injury, Broker Exane BNP Paribas cut its rating on the stock to ‘underperform’ from ‘neutral’. Shares lost 3% to 7,602p.
Elsewhere, 888 Holdings appears to have lost out in the takeover battle for Bwin.Party (LON:BP.Y) after a significantly higher bid from GVC Holdings (LON:GVC) was recommended.
The offer is 25p plus 0.231 GVC shares for each Bwin share, equating to just under 130p per share, valuing Bwin at £1.1bn.
Shares in GVC dropped 5.2% to 429p while Bwin lost 3.4% to 111p on the news. 888 Holdings nudged 0.5p higher to 162.5p.
In small caps, Goldplat (LON:GDP) said its core business remains “robust,” with sales expected to be around £4.2mln for the year, compared to £3.5mln in 2014, with pre-tax profit significantly ahead of market expectations. Shares jumped 9.7% higher to 2.5p.
Elsewhere, IS Solutions (LON:ISL) signed two new contracts with financial services firms, which are expected to be worth more than £4mln in revenue with over the lives of the contracts, and £350,000 per year after.
Sales in its Analytics range are “well ahead of management budget.” Shares rocketed 32% to 68p.