Spreadex Market Update
Commodity collapse fuels FTSE’s losses this Monday
This caused the FTSE to hit a 100 point drop as its commodity stocks took a severe turn for the worse, with some massive losses in the mining sector. Rio Tinto and Antofagasta fell by over 4%, whilst Anglo American was down nearly 8%, Lonmin dropped 10% and KAZ Minerals plunged a whopping 19%.
However Glencore, as it has been for much of the year, was the biggest loser, crashing by over 22% to a fresh all-time low after selling its Araguaia nick project for a discounted price of £5.3 million. Things were made worse for the stock with an update by Investec that asked ‘how much value will be left for equity holders if commodity prices do not improve’.
The Eurozone was no better this morning; the DAX was firmly entrenched in its latest 3 digit decline whilst the CAC fell by nearly 2%, with a 6% drop for Volkswagen inspiring further auto sector-wide losses.
And it doesn’t look like the US open will bring about any improvement, with the Dow Jones looking at a 100 point drop when the American session gets underway. After its reactions to the rate-hike hinting Yellen speech and strong GDP number suggested that the index isn’t as adverse to positive US data as it has been for the majority of the year, this afternoon’s releases (including the core PCE price index, a Fed favourite) should give a sense of the Dow’s data-mindset ahead of Friday’s non-farm jobs report.
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