Overview: the FTSE 100 is set to recoup part of yesterday’s losses, being projected to open 0.6% to bounce back from yesterday’s falls, which saw the blue chip index shed 1.7% as commodities declined as the US market showed weakness following disappointing results from Bank of America (NYSE: BAC), which reported a quarterly loss of US$2 billion, and Morgan Stanley (NYSE: MS), whose quarterly earnings missed forecasts.
The Dow Jones Industrial Average slid 1.15%, while the broader S&P 500 index was down 1.1% and the technology heavy NASDAQ composite declined 1.25%.
Asian markets were mixed. Hong Kong’s Hang Seng lost 1.2%, China’s Shanghai composite index dropped 0.3%, Australia’s S&P/ASX 200 was down 0.9% while Japan’s benchmark Nikkei 225 added 1.2% and South Korea’s KOSPI rose marginally.
Oil and metal prices declined yesterday to weaken the mining and energy sectors. Base metal focused ENRC (LSE: ENRC), Xstrata (LSE: XTA) and Antofagasta (LSE: ANTO) were at the bottom of the pile with losses of over 6%. Platinum miner Lonmin (LSE: LMI) joined in with a 6.2% decline. Sector peers Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL) shed more than 5%.
Just four FTSE 100 constituents were able to add 1% or more yesterday. Pharmaceutical company Shire (LSE: SHP) led the blue chips with a 2.5% advance. Telecom company Cable & Wireless (LSE: CW) and Scottish and Southern Energy (LSE: SSE) tacked on more than 1% and United Utilities (LSE: UU) climbed 1%. Communications services group WPP (LSE: WPP), airline British Airways (LSE: BAY) and publisher Reed Elsevier (LSE: REL) added nearly 1%.
Oil prices were fluctuating around yesterday’s levels with March Brent Crude inching higher to US$76.47/barrel, while US light, sweet crude held on to US$78/barrel.
Precious metals recouped some of their losses with gold returning to US$1,113/oz just two days after standing at US$1,130/oz, while silver and platinum inched up to US$17.92/oz and US$1,626/oz respectively.
Base metals also showed slight improvement as copper and nickel reached US$3.38/lb and US$8.47/lb, while zinc rose to US$1.09/lb.
Investors are looking to January’s CBI industrial trends survey in the UK and also to the weekly jobless claims and Philly Fed index updates, which are due to come out in the US later in the day.
Disclosure: The author holds no positions