Spreadex Market Update
Volkswagen continues to hog headlines, fears for German economy grow
Now that the available facts around the emissions issue have been processed, focus is turning to who else is implicated in the deceit, namely whether the German government failed to act on information it received earlier in the summer. Analysts are also increasingly gloomy about what the situation means for the entire German auto sector and, effectively, the German economy as a whole. This meant, despite the continued rebound from VW and Porsche, said fears, coupled with a slip in the Gfk German consumer climate figure and an expected fall in the Ifo business climate number, pushed the DAX lower soon after the open.
In contrast, further declines in the mining sector are taking their toll on the FTSE, which fell by around 15 points at the open. And like the rest of the week, there is little UK-related news to lift the index its current dip, leaving it reliant on a change in sentiment in the commodity sector if it wants to firmly edge into the green.
Beyond the mining stocks, Poundland was one of the morning’s biggest losers; despite the successful progress of its 99p Store purchase, the stock dropped around 5% to a 3 and a half month low of £2.95 as it announced its half-year pre-tax profits would be lower than expected due to higher opening costs for new stores. Thomas Cook, on the other hand, jumped by nearly 5% this morning as it reaffirmed its full year outlook (complete with a £25 million hit from Tunisia and Greece related issues) whilst claiming its fourth quarter had benefited from sun-seeking northern Europeans trying to escape the dismal summer weather.
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