FTSE flops on the open despite Chinese recovery.
A bounce in Chinese equities after yesterday’s rout wasn’t enough to convince UK markets this morning, with equities selling off hard on the open. The Ukraine situation continues to rumble with no conclusion which doesn’t help sentiment, but news that Russia is drafting a counter offer to US demands at least shortens the odds of a diplomatic solution.
Financials led the losses, with FX rigging in the headlines again this morning, reminding investors of the potential for another wave of penalties for the industry. Mark Carney will be quizzed by MP’s later today on allegations that the BoE failed to act on known attempts to manipulate FX rates dating back as far as 2006.
Yesterday saw us pre-empting a positive US response with little success, so the run up to the opening bell on the other side of the pond may be a little twitchy this afternoon, but with little else on the agenda this afternoon that would now seem the obvious focus for traders.
One miner heading quickly in the wrong direction was African Barrick gold, who nosedived over 13% after Barrick gold announced the sale of a near 10% stake in the firm. Canadian based Barrick gold corp is the largest gold miner in the world, and will wind down its stake in its UK based subsidiary as it aims to raise capital to offset a slump in gold prices.
Inchcape nudged up over 2.5% after posting an 11% hike in full year pre-tax profits , with emerging markets a surprise performer. The numbers beat analyst expectations and the firm remains upbeat on the 2014 outlook. Given their position as a luxury car dealer it’s perhaps an even greater surprise to see growth driven by emerging markets, notably south America, but it seems top end consumer demand remains encouraging and many other UK listed consumer goods names will hope that trickles down to the lower tiers.
Fenner headed lower after forecasting modest full year growth below expectations. Poor relative performance in the last 6 months has been largely due to very strong trading in the same period last year, notably in Australia. The update has prompted a downgrade from Finncap, who cut their outlook to hold and helped send the stock over 5% lower.
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