Spreadex Market Update
BHP Billiton leads miners (and FTSE) lower with first loss in 16 years, whilst Persimmon rises on ‘outstanding’ full year figures
There’s been plenty of action since yesterday’s positive push that could dictate trading: a FTSE100(ish)-backed letter from businesses supporting the ‘In’ campaign, but with the purposefully apolitical supermarkets refusing to sign; a rather insipid Asian session that saw both the Nikkei and Shanghai Composite dip into the red; and the first fall in fourth quarter German exports since 2012 (sending the DAX around 90 points lower in the process).
Much of yesterday’s surge was in relation to Brent Crude, which climbed over 4% to tickle the $35 per barrel mark; this morning, however, it has slipped back by around a dollar, taking with it some of the FTSE’s thrust in the process. It doesn’t help that the mining sector got its own unwelcome surprise; whilst it was expected that BHP Billiton would post its first half year loss in 16 years (coming in £4 billion in the red) analysts were still looking for a 31p dividend. Instead BHP slashed its interim payout by 75% to 16p, whilst also sacrificing its progressive dividend policy in order to protect its credit rating. The company’s subsequent 3.5% slide helped ensure its mining peers started the day at a loss, dragging the FTSE down by nearly 50 points after the bell.
There was good news elsewhere, however. After a rough, Brexit-fearing day on Monday the housebuilding sector got a boost this morning in the form of Persimmon’s full year report; hot on the heel of Bovis Homes’ stellar figure Persimmon posted a 34% surge in underlying pre-tax profit of £637.8 million off the back of a 13% rise in revenue to £2.9 billion. This helped Persimmon regain Monday’s losses, and then some, jumping nearly 5.5% as the day got underway.
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