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Mining shares are helping to support the market in what looks set to be another volatile day.
Following on from better than expected trade data on Monday from China, a key consumer of commodities, Anglo American has added 41.5p to 1429.5p, BHP Billiton is 18.5p better at £16.79 and Rio Tinto has risen 85p to £31.75. Five of the top ten risers in the FTSE 100 are mining shares.
Overall, after another overnight slump on Wall Street which saw the Dow Jones Industrial Average drop 223 points or 1.35%, the FTSE 100 is currently down 27.14 points at 6339.10. The recent concerns about global growth - Chinese trade data aside - as well as factors such as the Middle East situation and the spread of Ebola continue to unsettle investors.
Weaker than expected UK inflation, with the consumer price index up just 1.2% compared to forecasts of 1.4%, sent the pound to a one week low of $1.5979 as the prospect of an interest rate rise seemed to move further into the distance.
With the oil price continuing to fall on concerns of oversupply as Opec appears reluctant to cut production despite demand worries as the global economy stutters, BP is down 5.45p at 426.5p. Rebecca O’Keeffe at Interactive Investor said:
Oil prices continue to fall, as a price war appears to be unfolding between Opec producers and the rest of the world. In previous cycles, the US economy would have benefited from lower oil prices, but with the US now a major oil producer, lower oil prices are having a negative effect. Oil importing countries including Europe, Japan and China should benefit from lower oil prices overall, but they do so against the backdrop of a weaker US.
Among the other fallers, Burberry has dropped 74p to £14.05 after the luxury goods group said markets were getting tougher despite a rise in first half sales. Handbag maker Mulberry has slumped 120.5p to 630p after the latest in a string of profit warnings.
Hargreaves Lansdown has fallen 20.5p to 854.5p despite reporting a record £47bn in assets in the first quarter, while revenue edged up from £70.1m to £70.8m. However it pointed out that stock market uncertainty was discouraging retail investors. Liberum analysts said:
We have been sellers of Hargreaves, not because we think it is a bad business, quite the reverse. However, we have been concerned about margin pressure and the ability to grow at the sort of rates the market valuation implies. Today’s statement confirms that both of these points continue to be issues.
Among the mid-caps, recruitment group Michael Page International is down 30.6p to 385p after it cut its full year operating profit guidance.
