Rallying Dollar Dents Commodity Stocks

Britain's leading share index slipped firmly into the red on Thursday morning. By midday, the FTSE 100 index was down 45.07 points or 0.9% at 5,275.19 after closing up 34.49 points or 0.7% on Wednesday.

Dominic Turner
shareprices.com - Thursday, December 17, 2009

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Comments from the U.S. Federal Reserve lifted the U.S. dollar to a three-month high against the euro forcing metal prices higher and putting pressure on commodity stocks. The central banking system indicated that it would start to withdraw its emergency support next year as the U.S. economy continues its steady recovery. In the mining sector, Antofagasta was down 27p to 916.5p and Kazakhyms down 31p to 1,261p. Australian miners Rio Tinto and BHP Billiton were both down by 2.1% and 0.6% respectively after the Chinese steel industry voiced its opposition to a "monopolistic" joint venture between the two.

There was uncertainty in the banking sector too with Barclays down 8.6p at 283.4p after news of a pending lawsuit against Barclays Capital in the U.S., whilst Lloyds Banking Group was down 2.4p at 53.2p and Standard Chartered down 33p at 1,554.5p.

British retail sales fell unexpectedly for the first time since May in November fuelling fears about Christmas trading and leaving retail stocks struggling. Marks & Spencer fell 2.4p to 399.6p and Kingfisher, which owns B&Q, fell 6.2p to 226.9p. Kesa Electricals, which owns Comet, fellow electrical retailer DSG International and Home Retail, which owns Argos, were also in the red.

On a positive note, Rentokil Initial, which is actually due to be relegated from the FTSE 100, supplemented Wednesday's gains, rising a further 3.3p to 108.3p after Deutsche Bank increased its target price for the stock.

 

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