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Markets slide after oil falls through $30 - business live

Discussion in 'Market News' started by Lily, Jan 14, 2016.

  1. Lily

    Lily Forum Member

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    All the day’s economic and financial news, as analysts claim that petrol could soon be cheaper than bottled water.


    8.16am GMT

    UK FTSE 100 starts the day below 5900 as the effect of last night's equity reversal in the United States impacts....

    8.14am GMT

    And we’re off! European market are falling sharply at the start of trading.

    In 2016, UK indices have suffered their worst start since 2008.

    There is plenty to worry about globally; China, emerging markets, commodity prices, monetary tightening, negative earnings momentum, high valuations and a tired looking bull market.

    8.04am GMT

    Over in the City, the Bank of England’s policymakers are gathering to set monetary policy.

    But there’s no chance of a rate rise, given the recent market turbulence and weaker economic data that has sent the pound to its lowest level against the US dollar since 2010.

    Investor sentiment towards the Sterling continues to weaken ahead of the anticipated Bank of England (BoE) rate decision today, in which markets broadly expect rates to be left unchanged at the record 0.5% low.

    Since the MPC’s December meeting, the overall outlook for the UK economy has dimmed considerably with a downwards revision of Q3 GDP and a decline in industrial productions renewing concerns around the potential slowdown in economic momentum in the United Kingdom.

    BOE 'change rates' button ready for yet another exciting day. pic.twitter.com/1hveDGCbP9

    7.55am GMT

    There’s mixed news from fashion chain Burberry this morning.

    On the upside, its sales in mainland China are growing again after a worrying slide last year. That helped send retail revenue up 1% in the last three months on 2015.

    Burberry comparable sales unchanged year-on-year, an improvement from 4% fall in Q2 as China returns to growth

    While Burberry was impacted by the ongoing challenges facing the luxury sector, headwinds in Hong Kong and Macau masked an otherwise stronger performance in many markets.

    7.45am GMT

    Home Retail has warned that poor sales at its Argos chain would hit group profits.

    That’s significant, as the company only recently rebuffed a takeover bid from Sainsbury’s.

    Argos posted a 2.2% fall in like-for-like sales in the 18 weeks to 2 January, worse than analysts had expected. Walk-in sales slumped 13% in December, with shopping centre and high street stores badly hit, which was only partly offset by 10% growth in digital sales.

    Home Retail’s other chain Homebase enjoyed 5% growth, boosted by kitchen and bathroom products. The company confirmed that is in advanced discussions to sell the DIY chain to Australia’s Wesfarmers for £340m.

    7.40am GMT

    City analysts are impressed with Tesco’s Christmas performance:

    Tesco UK like-for-like sales up 1.3% in six weeks ending January 9. Group like-for-likes up 2.1%.Beats consensus from City analysts.

    Impressive that Tesco even managed positive like for like growth over Xmas in Extra stores.

    Coming off coupons impacted the quarter -1.5%. But Christmas was positive. Well deserved tesco. They had a wonderfully cohesive store plan.

    Tesco UK LFL Xmas +1.3% much much better than expected. Together with SBRY & Morrison's suggests Britins spent more at Xmas

    7.38am GMT

    On a busy morning for retail news, Tesco is grabbing the headlines.

    Britain’s largest supermarket has defied its critics by reporting a 1.3% rise in sales over the Christmas period. It suggests CEO Dave Lewis is making good progress in his labours to turn the company around.

    Tesco cheered the City with news of a much stronger than expected performance over Christmas, pushing sales in its core UK supermarkets business up by 1.3%. Most analysts had been expecting sales to fall.

    Chief executive Dave Lewis said the group, Britain’s biggest retailer, had benefitted from lower prices on what he called “an outstanding range of products.”

    Related: Tesco beats forecasts with Christmas sales rise

    7.34am GMT

    Brent crude is bobbing around $30.50/barrel this morning, after hitting $29.73 last night.

    “With no apparent end in sight to the free-falling price of oil, motorists can expect some really low fuel prices in 2016.

    “Breaking through the pound a litre price point for both petrol and diesel was clearly a welcome landmark, but it looks as though there is more to come.

    7.30am GMT

    Angus Nicholson of IG has warned that “a negative feedback loop of self-perpetuating fear seems to have gripped global markets”, as shares dive across Asia.

    Today’s selloff is also being driven by renewed fears over the situation in China, and the possibility that Beijing will devalue the yuan sharply.

    China’s poor communication of FX (foreign exchange) policy and concomitant selloff in its equities appear to have lit a fire of negativity beneath global market sentiment. The threat of a dramatic devaluation by the Chinese government to ease its deflationary and debt-related pressures hangs heavy on markets like a Sword of Damocles.

    Despite China’s successful efforts this week to regain control over the offshore renminbi, the possibility of a major one-off devaluation in the currency is probably far higher than a black swan tail risk event. The fact that it is reportedly even being discussed by People’s Bank of China (PBoC) advisors likely assigns it a probability as high as 20%.

    7.22am GMT

    Pessimism has swept through Asia today, sending markets down to a three-year low.

    The sight of Brent crude oil below $30/barrel prompted big losses across the major indices.

    7.07am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    US stocks fell heavily on Wednesday, with the Standard & Poor’s 500 falling 2.5% to take the index below 1,900 points for the first time since September, due to growing concerns about the falling oil price, which dipped below $30 a barrel for the first time in nearly 12 years.

    The S&P 500, which closed at 1,890 points, suffered its worst day since September and has fallen by 10% since its November peak taking it into “correction” territory, something that has not happened since August 2014.

    Related: Oil and US share prices tumble over fears for global economy

    Our European opening calls: $FTSE 5887 down 74 $DAX 9845 down 116 $CAC 4333 down 59 $IBEX 8805 down 130 $MIB 19899 down 241

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