LONDON (ShareCast) – (ShareCast News) – Far weaker than expected data on the US housing markets proved to be the proverbial straw that broke the camel’s back on Friday, setting of another round of selling in stocks and commodities ahead of next week’s US Federal Reserve policy meeting. The Footsie ended the session with losses of 75.30 points or 1.13% to reach 6,579.81 points.
In parallel, three-month copper futures ended the session 1.0% lower to $ 5,240 per metric tonne on the LME. Front month Brent crude futures ended the day down by 1.4% to $ 54.50 per barrel on the ICE.
US new home sales fell 6.8% to reach an annualised pace of 482,000 in June, well below the 548,000 expected by the consensus. Nevertheless, despite those numbers Barclays (LSE: BARC.L – news) kept its tracking estimate for US second quarter GDP growth at 3.2%.
The US data came on the back of weaker than expected readings on the Chinese and Eurozone’s manufacturing sector, The Markit China manufacturing sector purchasing managers’ index for July dropped to a reading of 48.2 – a 15-month low – following a print of 49.4 for June. That was a much worse outcome than economists’ median projection of 49.7.
The figures came on the heels of a warning overnight regarding downside risks to Japanese economic growth from the International Monetary Fund and a further drop in oil and gold prices.
Gold futures on COMEX were moving lower by 0.83% to $ 1,085 per ounce after analysts at Macquarie lowered their gold price forecasts for 2015 and 2016 to $ 1,152 and $ 1,163 per ounce, respectively, from $ 1,249 and $ 1,363 beforehand.
Markit (NasdaqGS: MRKT – news) ‘s PMI for euro-area manufacturing released on Friday morning slipped to a reading of 52.2 for July, down from June’s print of 52.5 which economists had been expecting to be repeated.
Barclays economists said: “There is no reason to overreact at this point […] today’s release nonetheless comes as a warning: that recovery in the euro area is not a given. In particular, jitters and possible contagion from Greece could have weighed on confidence more than expected.” Now (NYSE: DNOW – news) it’s investors who are facing a conundrum? In a more strident tone, one strategist wrote to clients: “What a conundrum we face: commodities are shouting that the global economy is deteriorating, key emerging markets are already seeing major volatility, and yet the world’s most important central bank is close to tightening monetary policy.” Greece was also a worry as negotiations between Athens and its creditors over a third bailout were put on ice until Monday.
“The demand from the International Monetary Fund, in a rather pedantic move, that Greece submit a formal request to the Washington-based institution before it would even consider a third bailout obviously didn’t help speed matters up either,” said Connor Campbell financial analyst at Spreadex.
Aggreko (LSE: AGK.L – news) hit by geopolitical concerns and oil and gas sector slowdown Shares (Frankfurt: DI6.F – news) in A ggreko tumbled 15% after the temporary power provider said its interim and full-year results are likely to miss market expectations as a result of on-going security challenges in Yemen and a further slowdown in its North American oil and gas related business. The company now expects full-year pre-tax profit to be between £250m and £270m at current exchange rates, which have moved adversely in recent months, compared with market expectations of around £290m.
Investors in Anglo American (LSE: AAL.L – news) breathed a sigh of relief that the miner had maintained its dividend, as it posted a 36% drop in first-half underlying earnings before interest and tax amid declining commodity prices.
Shares in drinks owner AG Barr fell after it said first-half profits would drop by about 5% compared with the year before. The stock fell by 2.05% to 620p at 0818 BST after the company said tough prior year comparatives, promotional phasing and poor weather contributed to the profit dip.
Vodafone said it has made a good start to the year, with organic service revenue up 0.8% in the quarter ended 30 June as the European businesses return to growth and customer demand for 4G and data takes off. Service revenue is the money the mobile phone company gets from customers’ plans and traffic on its network. The figures came in better than expected and ahead of the 0.1% increase in the fourth quarter.
Hammerson (Other OTC: HMSNF – news) posted a total return on property investment of 5.7% in its first half trading update, 1% ahead of estimates. The property owner said its outperformance was principally due to growth in its premium outlets and developments. Healthcare giant GlaxoSmithKline (Other OTC: GLAXF – news) said its malaria vaccine has passed its last scientific hurdle, although the immunisation programme in sub-Saharan Africa could be still over 12 months away. On Thursday, the treatment, aimed at young children, was given a positive scientific opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use on Thursday.
Shares in Lonmin (LSE: LMI.L – news) slumped on Friday as the platinum producer said third quarter operations were held back by an increase of safety stoppages as the number of injuries rose. The group reported a total of 2.7m tonnes mined in the quarter, 2.4m tonnes higher than a year ago when strikes hurt production.
Market Movers techMARK 3,166.21 -0.41% FTSE 100 6,579.81 -1.13% FTSE 250 17,499.11 -0.68% FTSE 100 – Risers Vodafone Group (NasdaqGS: VOD – news) (VOD) 238.45p +2.80% RSA Insurance Group (RSA) 452.10p +1.82% Land Securities Group (LAND) 1,297.00p +0.93% Severn Trent (Other OTC: STRNY – news) (SVT) 2,166.00p +0.37% Hikma Pharmaceuticals (LSE: HIK.L – news) (HIK) 2,088.00p +0.34% Associated British Foods (LSE: ABF.L – news) (ABF) 3,180.00p +0.19% G4S (GFS (Taiwan OTC: 6026.TWO – news) ) 268.00p +0.15% Barclays (Swiss: BARC.SW – news) (BARC) 282.15p +0.14% British Land Company (BLND) 829.00p +0.12% Royal Bank of Scotland Group (RBS (LSE: RBS.L – news) ) 353.80p +0.11% FTSE 100 – Fallers Antofagasta (LSE: ANTO.L – news) (ANTO) 589.00p -6.28% Glencore (GLEN) 210.15p -4.50% BHP Billiton (NYSE: BBL – news) (BLT) 1,123.50p -3.81% Ashtead Group (LSE: AHT.L – news) (AHT) 940.00p -3.54% Anglo American (AAL) 778.00p -3.52% Rio Tinto (LSE: RIO.L – news) (RIO) 2,400.50p -3.52% Weir Group (WEIR) 1,500.00p -2.91% Johnson Matthey (LSE: JMAT.L – news) (JMAT) 2,778.00p -2.90% Shire Plc (Xetra: S7E.DE – news) (SHP) 5,495.00p -2.57% Carnival (CCL) 3,405.00p -2.52% FTSE 250 – Risers Beazley (BEZ (Shanghai: 600658.SS – news) ) 340.90p +6.37% Shawbrook Group (LSE: SHAW.L – news) (SHAW) 341.00p +6.07% CSR (CSR (LSE: CSR.L – news) ) 897.00p +3.10% Auto Trader Group (AUTO) 332.20p +3.01% Just Eat (Other OTC: JSTLF – news) (JE.) 451.70p +2.96% Howden Joinery Group (HWDN) 485.60p +2.27% Domino’s Pizza Group (DOM) 816.50p +2.06% Aveva Group (Other OTC: AVEVF – news) (AVV) 2,300.00p +2.04% Playtech (PTEC) 924.00p +1.99% Jimmy Choo (LSE: CHOO.L – news) (CHOO) 170.80p +1.67% FTSE 250 – Fallers Lonmin (LMI) 62.35p -17.42% Aggreko (AGK) 1,255.00p -12.24% Evraz (EVR) 104.50p -5.43% Barr (A.G.) (BAG) 606.00p -4.27% William Hill (Other OTC: WIMHF – news) (WMH) 388.70p -3.88% AO World (AO.) 124.10p -3.80% Enterprise Inns (LSE: ETI.L – news) (ETI (Shenzhen: 002005.SZ – news) ) 117.30p -3.77% Acacia Mining (Other OTC: ABGLF – news) (ACA) 235.00p -3.57% Home Retail Group (HOME) 163.40p -3.54% Vedanta Resources (Other OTC: VDNRF – news) (VED) 432.30p -3.33%