Overview: the FTSE 100 is projected to start about 0.3% lower following Monday’s late fall in the US stock market, which had its early gains trimmed to a minimum late in the afternoon after Fed Chairman Ben Bernanke said that low interest rates would remain unchanged for a while, cautioning that the economy was still facing “formidable headwinds” ahead.
The Dow Jones Industrial Average was roughly unchanged, the broader S&P 500 index declined 0.25%, while the technology heavy Nasdaq composite dropped 0.2%.
Asian markets also switched to selling mode following Bernanke’s comments. Hong Kong’s Hang Seng was down 0.6%, Japan’s benchmark Nikkei 225 index also slid 0.6%, while China’s Shanghai composite index tumbled 1.1%, impacted by losses in the financial sector.
Commodities
Oil prices inched slightly higher following Monday’s declines. January Brent Crude was at US$76.69/barrel, while US light, sweet crude for January delivery rose to US$74/barrel.
Precious metals bounce back after falling heavily on Monday as gold returned to US$1,160/oz, while silver and platinum reached US$18.18/oz and US$1,453/oz, respectively.
Base metals were slightly higher as copper and nickel stood at US$3.17/lb and US$6.85/lb respectively, while zinc improved to US$1.05/lb.
The UK blue chip index posted a small loss of 0.2% yesterday after absorbing losses in the banking sector, while miners were mixed. Part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were the biggest fallers among the blue chips, declining 4.1% and 4.7% respectively, while airline British Airways (LSE: BAY) was a distant third with a 2.2% slide. Another bank Barclays (LSE: BARC) was down 2.1%, while sector peers HSBC (LSE: HSBA) and Standard Chartered (LSE: STAN) each lost about 1.5%. Other notable fallers included London Stock Exchange Group (LSE: LSE) and engineering firm Amec (LSE: AMEC), which also shed 1.5%.
Tour companies did well yesterday as Thomas Cook (LSE: TCG) and TUI Travel (LSE: TT) advanced 2% and 1.5% respectively. Specialty distribution firm Bunzl (LSE: BNZL) also tacked on 2%, while miner Antofagasta (LSE: ANTO) emerged atop the leaderboard with a 2.2% gain. Other notables included defence systems manufacturers BAE Systems (LSE: BA) and Cobham (LSE: COB) with gains of over 1% and broadcaster BSkyB (LSE: BSY), which rose 1%.