Overview: The US stock market failed to recover from an early fall yesterday as the US dollar rose, pushing down commodity prices to weaken energy stocks. The Dow Jones Industrial Average ended the day 0.9% below the opening level, the broader S&P 500 index shed 1.3%, while the technology heavy Nasdaq composite was down 1.7%.
Asian markets also switched to selling mode as Hong Kong’s Hang Seng was down 0.5%, China’s Shanghai composite index retreated 0.4% and Japan’s Nikkei declined 0.5% to hit four month lows and post its first losing streak in a year.
Oil prices slightly improved after Thursday's fall with January Brent Crude climbing to US$77.93/barrel, while US light, sweet crude for January delivery inched higher to US$77.75/barrel.
Precious metals were mixed as while gold climbed back to US$1,145/oz, silver and platinum declined to US$18.53/oz and US$1,439/oz respectively.
Base metals were able to recoup some of yesterday’s losses with copper and nickel improving to US$3.09/lb and US$7.72/lb respectively, while zinc rose to US$1.01/lb.
The FTSE 100 is seen opening up to 20 points higher today due to the recovery in commodity prices. The blue chip index moved down 1.4% yesterday, pushed down by losses in the mining sector in response to lower metal prices. Base metals focused miners Antofagasta (LSE: ANTO) and Xstrata (LSE: XTA) along with silver producer Fresnillo (LSE: FRES) were the biggest fallers in the index with losses of over 5%. Specialty chemicals firm Johnson Matthey (LSE: JMAT) and copper miner Kazakhmys (LSE: KAZ) followed with declines of 4.5% and 4% respectively. Anglo American (LSE: AAL) and Rio Tinto (LSE: RIO) fell 4%. Heating and plumbing equipment manufacturer Wolseley (LSE: WOS) was the only non-mining stocks on the top fallers list with a 4% loss.
Just two FTSE 100 constituents added 1% or more. Beverage group SABMiller (LSE: SAB) and consumer goods company Reckitt Benckiser (LSE: RB) advanced 3.2% and 1.1% respectively.
National Gris (LSE: NG) and Resolution (LSE: RSL) added slightly less than 1%.
Morning news wrap
Safety and quality services provider Intertek (LSE: ITRK) said today it was in discussions with Det Norske Veritas in relation to acquiring the vast majority of its business assurance division. The acquisition is expected to be a share only deal, while the business is expected to post revenues of £200 million this year.
In the FTSE 250, Chemring Group (LSE: CHG) has completed a US$280 million private placement of fixed interest loan notes.