The London market crashed on Thursday after new warnings about the economy from the US Federal Reserve’s Janet Yellen.
The FTSE 100 Index fell 148.88 points to 5523 as Yellen warned on financial market turbulence and suggested further rate hikes could be delayed, fuelling already raised anxiety about the health of the global economy.
Mike van Dulken at Accendo Markets said: "US markets experienced a late sell-off, no doubt hastened by Fed chair Janet Yellen’s comments which strayed into ‘fraught’ financial crisis territory, talking of the possibility of negative interest rates should the need arise."
But gold popped back up above US$1,200 after the USD weakened following Yellen’s comments. Precious metal miners benefited, with Randgold Resources (LON:RRS) rising 250p, or 4.4%, to 5950p and Fresnillo ((LON:FRES) twinkling 45p to 875p.
In UK economic news, fewer than one in 1,000 mortgages ended in repossession in 2015, according to the latest update from the Council of Mortgage Lenders. With fewer than one in 100 mortgages in any sort of arrears, at 0.92%, the annual arrears rate was also at its lowest for more than a decade.
Back in the equity markets, tobacco group Imperial Brands (LON:IMB) lost 17p to 3501.5p after it said revenue rose but volumes fell.
Rio Tinto (LON:RIO) backtracked 89p to 1676p as it slumped into the red, cut future dividends and started another round of cost savings.
Ariana Resources (LON:AAU) said its local partner Proccea was making “rapid progress” with the construction of the pair’s Kiziltepe Mine in Turkey and it remained on course for first gold pour in the second half of the year. Shares lifted 0.07p, or 8.1%, to 0.93p.
Metal Tiger shares hardened 0.02p, or 2.9%, to 0.9p after the Botswana government formally agreed the transfer of 14 licences into a joint venture company it has with Australian firm MOD Resources (ASX:MOD).
MARKET PREVIEW
London’s blue-chip stocks are expected to open Thursday lower, following US equities.
A familiar volatility continues to bea factor for investors.
Wall Street gave up its short-lived rally amid new warnings about the economy from the Federal Reserve’s Janet Yellen.
The Fed chair indicated there may not be any more interest-rate rises in the near term whilst warning that stock market weakness may pose threats to the real economy.
On Wall Street, the Dow Jones fell 99 points, 0.6%, closing Wednesday at 15,914. The S&P 500 was mostly flat, ending the session at 1,851 and the Nasdaq actually gained 0.45% to 4,283.
Elsewhere, there was further volatility and some divergence in the oil market.
US crude futures fell about 3.5% to $27 per barrel, meanwhile Brent moved 1.1% higher to around $30.70.
London’s equities, meanwhile, are seen lower.
IG Markets calls the FTSE 100 down nearly 50 points, at 5,616 to 5,621.