13th Nov 2015 08:39
LONDON (Alliance News) - UK equity indices opened mostly lower Friday, extending the heavy losses posted on Thursday, with commodity prices and a raft of macroeconomic data from across Europe and the US in focus.
The FTSE 100, which posted its heaviest daily fall since September on Thursday, opened down 0.5% at 6,145.59, while the FTSE 250 was down 0.3% at 16,813.53 and the AIM All-Share index was flat at 737.19.
In Europe, the CAC 40 in Paris was down 0.6%, while the DAX 30 was down 0.5%.
Overnight, on Wall Street, the DJIA and S&P 500 both closed down 1.4%, while the NASDAQ Composite lost 1.2%.
Thursday's sell-off stemmed from a combination of weak Chinese economic data, hawkish remarks by US Federal Reserve Board members, and a fall in the price of copper and oil, with mining and oil-related stocks among the heaviest fallers, and this negative sentiment has rolled into Friday's session.
In Asia, the Japanese Nikkei 225 closed down 0.5%, while the Hang Seng ended down 2.2% and the Shanghai Composite closed down 1.4%.
Shortly after the UK stock market open, gold traded at USD1,082.95 an ounce, having stood at USD1,078.18 an ounce at the equity market closing bell Thursday. Brent oil, meanwhile, traded at USD45.57, having traded at USD44.42 a barrel at the close of the UK equity market Thursday, but is still way below its November high of USD50.88 per barrel.
In the forex market, shortly after the UK equity market opening bell, sterling trades at USD1.5217 and the euro trades at USD1.0764.
At the individual UK equity level, FTSE 100-listed BHP Billiton was the biggest riser in the blue-chip index shortly after the London opening bell, up 2.1%.
The mining company, which closed down 5.0% on Thursday, provided an update on the tailings dam breach at its Samarco Mineração joint venture with Brazilian miner Vale, saying nine fatalities have been confirmed so far and the operating licence for the site has been suspended.
Operations at the Samarco site will remain suspended as authorities open investigations into the incident and rectification plans are developed. BHP said Samarco is continuing to monitor the tailings facilities impacted by the dam breach at the project and is working up plans to reinforce the dam structures and stabilise the local area.
Meanwhile, Rolls-Royce shares continued their decline from Thursday, down 3.2% at the open.
FTSE 250-listed Auto Trader Group, up 4.7%, was the mid-cap index's leading riser after it proposed a maiden interim dividend and reiterated confidence in meeting its expectations for its full financial year, as it reported a sharp jump in pretax profit in the first half due to a significant reduction in finance costs.
The digital automotive marketplace operator proposed a maiden interim dividend of 0.5 pence following its listing on the London Stock Exchange in March.
For the half year to end-September, Auto Trader reported a pretax profit of GBP74.7 million, multiplying from GBP13.1 million a year before, as revenue rose to GBP138.2 million from GBP127.5 million. The leap in profit was primarily the result of a GBP46.2 million reduction in finance costs as Auto Trader benefited from a lower level of debt than under its previous private ownership, and with that debt less expensive.
Housbuilding and construction company Galliford Try, up 1.5%, was another big riser in the FTSE 250. The company said market conditions remain strong for all of its business, and it remains confident on its outlook for the current financial year.
In a statement to be given to the company's annual general meeting, Galliford Executive Chairman Greg Fitzgerald said trading in the current financial year to the end of June 2016 has been good, and it remains confident on meeting its expectations for this year and on delivering its strategy out to 2018.
IMI was the biggest loser in the mid-cap index, down 3.8%, following a number of negative broker ratings changes. JP Morgan has downgraded the engineer to Neutral from Overweight, cutting its price target to 930 pence from 1,100p, while Societe Generale has lowered its recommendation on the company to Hold from Buy, slashing its price target to 975 pence from 1,350p. Deutsche Bank, meanwhile, has retained its Hold recommendation, but cut its price target to 1,170p from 1,250p.
In macroeconomic data released ahead of the UK equity market close, statistical office INSEE revealed that the French economy expanded as expected in the third quarter. The preliminary reading of French gross domestic product came in at 0.3% quarter-on-quarter, having remained flat at 0.0% in the previous quarter, coming in in-line with economists' expectations, according to FXStreet.com.
According to Bank of France survey released this week, the French economy is set to expand 0.4% in the fourth quarter.
Preliminary data from Germany, meanwhile, showed that economic growth slowed in the third quarter, with GDP expanding 0.3%, having grown 0.4% in the previous quarter. According to FXStreet.com, this was in line with economists' forecasts.
Still ahead in the data calendar Friday, preliminary third-quarter Italian and eurozone GDP figures are scheduled to be released at 0900 GMT, ahead of Italian CPI data for October and eurozone trade balance readings for September at 1000 GMT.
In the US, producer price index and retail sales data for October are scheduled to be published at 1330 GMT. The preliminary reading of the Reuters/University of Michigan consumer sentiment index for November is due at 1500 GMT, at the same time as US business inventories information for September.
By James Kemp; [email protected]; @jamespkemp
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