The London trading week began on a negative note as dealers took a breather after last week's gains.
The FTSE 100 Index fell 24.87 points to 6,391.29 as markets digested last week’s 286-point surge.
Falls came despite buoyancy in Asian markets on the back of reports that Beijing is set to pump money into the Chinese economy.
Some gains in oil and mining failed to counter losses in banking and pharmaceuticals. AstraZeneca (LON:AZN) led the latter sector lower following last week’s news that trials for two of its key pipeline cancer treatments had been halted. Shares in the UK drug group fell 36p to 4,173.5p.
BP (LON:BP.) spurted 1.2p to 392.8p but Royal Dutch Shell (LON:RDSB) and BG Group (LON:BG.) were both off colour despite slight rises in the price of Brent and US light crude to US$53 and US$50 respectively.
Glencore also dropped 0.35p to 128.75p after the beleaguered miner announced it was selling copper mines in both Australia and Chile, its latest debt-reducing move following last week’s zinc production cuts.
Other miners were mixed, with Rio Tinto (LON:RIO) losing 1.5p to 2,598p after it vowed not to cut copper production. But BHP Billiton (LON:BLT) gained 2p to 1196.5p and Anglo American (AAL) toughened 0.4p to 726.9p.
Elsewhere, African budget carrier Fastjet (LON:FJT) ascended 4p to 91p on news that it had secured an air service licence in Kenya.
MARKET PREVIEW
The FTSE 100 is set mark time on open as investors take stock after last week’s strong surge in the blue-chip index that mirrored a new-found sense of confidence on world equity markets.
In Asia overnight China led the way amid reports Beijing is ready to invoke stimulus measures to lighten the blow of the economic slowdown.
The Shanghai Composite rose 3.7%, while in Hong Kong the Hang Seng was up 1.2%. Japan was closed for Health and Sports Day.
The spread betting firm IG is predicting Britain’s top stocks index will open its account on Monday down 17 points at 6,399.6 – a none-too-surprising pause for breath after last week’s 286 point surge last week.
Perhaps we will see a reaction – albeit a delayed one – the rather gloomy economic analysis from the International Monetary Fund in Lima, Peru.
Possibly. But as Michael Hewson, chief analyst at CMC Markets, pointed out: “While weekend events in Lima at the IMF annual meetings focused on the risks to the global economy, last week’s rebound in equity markets would appear to suggest that investors are for now, fairly sanguine about these risks, though emerging markets remain a cause for concern.”
We are looking at a busier week for corporate news both here and the States.
And, of course, we have the putative super-merger in the brewing sector with SAB Miller and AB InBev continuing their courtship. The bid would create a US$110bn Goliath of the sector.