Spreadex Market Update
Standard Chartered and Associated British Food tumble with UK construction PMI to come
The construction sector did some serious damage to the UK’s GDP in the third quarter, so investors will be eyeing today’s number carefully to note the potential impact on Q4’s growth. With that in mind investors seemed wary of doing much FTSE-wise, leaving the UK index effectively flat at the open.
Interestingly for once it wasn’t the FTSE’s commodity sector providing the brunt of the drag. Announcing plans to cut 15000 jobs, Standard Chartered sunk by over 6% this morning with investors unimpressed with its strategy to ‘refocus’ through a £3.3 billion rights issue in light of its £91 million third quarter pre-tax loss. Also on the chopping block this morning was Associated British Foods; the company, arguably now best known for its high street favourite Primark, saw its full year pre-tax profits plunge 30% to £717 million as its sugar division saw a heart-stopping 77% fall in annual profit to £43 million. And with Primark’s slender growth failing to offset the nightmares ABF is having in its food sector the stock slipped by 2% after the bell.
The DAX looked slightly less fresh this morning; falling by around 30 points, the German index is once again suffering at the hands of Volkswagen. With the US probe into the car giant’s emissions deception stating the issue includes not only the previously specified models but vehicles found under the Audi and Porsche banners Volkswagen took a DAX-harming 4% tumble this Tuesday morning.
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