“Investors in FTSE 100 trackers are likely to be affected the most from Glencore’s troubles – as the mining company continues to impact the United Kingdom benchmark”.
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With an hour of trading to go the FTSE 100 was up 2.2 per cent, or 128.2 points at 6,038.4 – meaning the index will end the month on a high note despite its worst quarterly performance for four years. Glencore was the top performer of the day, up by 16 percent, recovering slightly from a 30 percent fall at the start of the week.
Shares pulled back a little at the start of London trading on Tuesday, with Glencore up 5.92 percent at 72.68 pence. Retail sales, in real terms, fell a seasonally and calendar-adjusted 0.4 percent month-over-month in August, confounding economists’ expectations for a 0.2 percent increase.
Over all this quarter has been shadowed by events that prevented the markets from flourishing, from the rate hike uncertainty in the U.S., the Euro Zones standoff with Greece, the unclear picture of China’s current state and growth prospects and the cherry on the cake, the emissions scandal that shaved 50BN in market value within a week.
The chain said a move to reduce promotions in favour of lower regular prices was making its demand forecasting more accurate, driving better availability and lower-than-expected waste levels.
At the heart of Glencore’s issue is its £20bn debt, which analysts say needs to be restructured, the cost of which is increasing while commodity prices are falling. Rio Tinto added 2.5 percent and BHP Billiton added 1.5 percent. At the same time, the jobless rate stood steady at 6.4 percent in September as expected. Tesco added 6.8%, and Morrisons was 6.3% higher. According to figures released by MNI Indicators, the Chicago Purchasing Managers’ Index slumped from 54.4 in August to 48.7 in September and below the 50 threshold that indicates expansion.
The paper also claims embattled supermarket retailer Wm Morrison is in a legal row with a clutch of property developers over a string of supermarket sites that it has pulled out of building.
The Eurozone’s annual consumer price index fell 0.1% in September compared to a 0.1% increase in August, Eurostat’s flash estimate revealed, missing analysts’ expectations for zero growth.
Meanwhile British consumer morale fell by more than expected in September as people anxious about China’s economic slowdown and Europe’s migration crisis. Economists had been expecting a reading of 188,000.
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On the corporate front, Sainsbury’s delivered a few welcome cheer from the under-pressure supermarket sector as it increased its profit outlook for the year after narrowing sales falls. In July, sales had risen 1.6 percent.
