Spreadex Market Update
Mining sector mayhem forces FTSE below 6000, Dow approaches 200 point drop
This afternoon’s US data provided little of the insight hoped for; a flat core PCE price index figure, better than forecast personal spending and an unexpected drop in pending home sales gave no indicator of how the Dow Jones will react to the more important figures released towards the end of the week, with the market-wide negative tone washing away any index-specific nuance.
Widening losses for the FTSE saw the index fall below the 6000 level it has struggled with all month, spurred on by a truly dismal day for its commodity stocks. Sharp declines for Brent Crude and copper (as the metal barely kept its head above the 6 year lows seen in August) had serious ramifications for the oil and mining sectors, with the latter having an astonishingly bad day. Anglo American approached its lowest price since its IPO in 1999, whilst Rio Tinto shed 100 points and KAZ Minerals plunged by 20%. Of course, the worst performer remained Glencore, which spent the day dipping its toes in fresh all-time lows as investors began (or rather, continued) to run out of patience with the stock.
The DAX and huge losses go hand in hand at the moment, and today was no exception; the German index dropped over 200 points as it remained perilously close to a new 2015 low. The CAC was in similarly dire straits this afternoon, easily the worst performing index percentage wise, lopping over 3% off its value as it fell below 4400. Akin to the FTSE’s commodity stocks, the European auto sector has been the biggest weight for the region’s indices, with a near 9% plunge by Volkswagen (obviously!) leading the downward charge.
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