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FTSE 100 seen lower after falls on Wall Street, commodities fall

The FTSE 100 is projected to start 28 points, or about 0.5% lower today to track falls on Wall Street, where tech stocks continued to show weakness. The markets were supposed by the Q4 US GDP update which came out on Friday, showing an annualized growth of 5.7% instead of the expected increase of 4.5%. The Chicago PMI (Purchasing Managers Index) also rose, increasing from 58.7 to 61.5 in December, signalling a higher level of business activity in the Midwest.

The Dow Jones Industrial Average slid 0.5% on Friday, while the broader S&P 500 index was down 1% and the technology heavy NASDAQ composite lost nearly 1.5%.

The UK blue chip index advanced 0.8% after getting propped up by a rebound in the banking sector, which suffered heavy losses earlier in the week after US President Barack Obama proposed to tighten regulations in the banking sector to curb risk taking.

Hospitality company Whitbread (LSE: WTB) was in the lead with a gain of over 3%, while oil and gas engineering firm Amec (LSE: AMEC) and miner Xstrata (LSE: XTA) followed, adding nearly 3%. Banks Barclays (LSE: BARC) and HSBC (LSE: HSBA) were up 2.5% and 2% respectively. Plumbing and heating equipment manufacturer Wolseley (LSE: WOS), publisher Pearson (LSE: PSON) and credit information group Experian (LSE: EXPN) also rose 2%.

Just seven FTSE 100 constituents lost more than 1% on Friday. Interdealer broker ICAP (LSE: IAP) was at the bottom with a loss of nearly 2%, while tour operator TUI Travel (LSE: TT) shed 2%, as did insurer Prudential (LSE: PRU), which broadcaster BSkyB (LSE: BSY), commercial property company Segro (LSE: SGRO) and another tour company Thomas Cook (LSE: TCG) lost slightly more than 1%.

Asian markets were mixed as Hong Kong’s Hang Seng was up 0.3%, Japan’s benchmark Nikkei 225 and Australia’s S&P/ASX 200 both posted marginal gains, South Korea’s KOSPI was up 0.25%, while China’s Shanghai composite index slipped 1.9%.


Oil prices were lower as March Brent Crude slid to US$71.49/barrel and US light, sweet crude was down to US$72.88/barrel.

Precious metals slightly improved following another round of losses with gold inching higher to US$1,082/oz, while silver and platinum rose to US$16.20/oz and US$1,511/oz respectively.

Base metals declined with copper and nickel retreating to US$3.01/lb and US$8.33/lb, while zinc slid to US$0.93/lb.

Economic data due to be released today includes the December personal income and consumption update along with January’s ISM report.

Disclosure: The author holds no positions in the company