Shares in the UK fell to a three week low on Thursday with the FTSE 100 falling below 6180 to its lowest level since November 17. European stocks undid yesterday’s gains with the German DAX dropping back below 10780.
A mixed set of Chinese trade data has helped cushion the rout in commodities with oil, gold and copper all slightly higher. The oil price collapse sends a signal of lower global demand and that is weighing on sentiment in equity markets.
Adding to pressure on stocks in the Eurozone there has been a modest bounce in the euro after the single currency retraced one third of its gains from last Thursday.
Data showed China’s imports of copper jumped 10% in November from a year earlier helping copper prices rise. Anglo American scrapping its dividend as part of a wider restructuring effort has temporarily muddied the daily correlation between miners and their underlying commodities. Anglo American has come out in front and set the president for the other miners to cut their dividends. BHP Billiton as second biggest faller on the FTSE today with a dividend yield of 11% but dividend cover of only 1 seems like the next likely candidate.
Oil maybe off its lows but there has been no rush for bargain hunting within the energy sector of the stock market with BP and Royal Dutch Shell both lower on the day by as much as 1%.
The British pound was lower but got a brief pop after UK manufacturing contracted more than expected over the month but higher revisions to previous months helped industrial production rise more than expected year-over-year.
US stocks look set for a lower start as the oil price drop weighs on sentiment and AutoZone and H&R block reported disappointing earnings afterhours ahead of quarterly results from Costco on Tuesday.
USA pre-opening levels
S&P 500: 6 points lower at 2,071
Dow Jones: 53 points lower at 17,677
Nasdaq 100: 20 points lower at 4,673
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