FTSE Makes Gains as Dollar Boosts Commodities

The FTSE 100 was boosted thanks to a weak US dollar, which helped to push up oil prices. Meanwhile, the oil giant Shell saw its share price fall significantly.

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shareprices.com - Thursday, February 04, 2016

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Standard and Poor cut Glencore’s rating, putting the company just one level above junk. The agency demoted the trader to the lowest investment grade, noting that the poor outlook for commodities and the disappointing performance of the company in 2015 made the company unappealing. It also cut its rating for Glencore’s debt.

S&P did note, however, that the company’s outlook is stable. Glencore has strong liquidity and it has already taken several steps to protect its balance sheet. Unfortunately, the fall copper, zinc and nickel prices mean that the outlook for Glencore and its peers remains poor.

In spite of this downgrade, Glencore remained strong, gaining seven percent over the course of the afternoon. Meanwhile, Wall Street got off to a mixed start during early trade, with the S&P 500 sliipping while the Dow Jones made modest gains.

In more local news, the Bank of England has voted unanimously to keep interest rates low. BCC Chief Economist David Kern said that the MPC@s decision to keep rates low was not a surprising one, given that the global economy has been so volatile over the last few months. The slowing pace of wage growth shows that inflationary pressure in the UK is low, and weakening growth in the US and China adds to the case for low interest rates in the medium term.

 

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