Investors were watching the markets this morning after a day in which the FTSE 100 fell below 6,000 points and the commodity industry took a punishing.
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“Given the amount of bearishness… particularly in respect to China, some of it has been vindicated to some extent today owing to the weak manufacturing number, but I do feel in some respects that was very much priced in to the market and there was a case of buying back in on the news”, London Capital Group’s Kelly said.
‘If pharmaceutical companies are increasing revenues and profits at the expense of patients by sharply increasing prices then we could well see a sharper scrutiny on the sector in terms of price transparency, and the sector could become a political football’.
BBA AVIATION – The engineer’s stock was a big FTSE 250 faller, down 4 per cent or 13.4p to 271.3p after agreeing to pay $2.07billion to acquire USA rival Landmark Aviation, in a deal to be financed by a heavily discounted £748.0million rights issue. Phoenix’s shares slip 3.5p to 823.5p. The broker also downgrades Mitchells and Butlers to hold from buy, with its shares off 0.9p at 326.3p. Press speculation has suggested that PR software and intelligence provider Cision, which is owned by private equity firm GTCR, is preparing a bid for PR Newswire. UBM shares gain 9.8p at 490.9p.
Shares in the Swiss trader and producer Glencore fell to a new intraday low of 99.6 pence a share, down more than 16% on the day, making it the worst performer in the U.K.’sFTSE 100 index.
Jonathan Sudaria, night dealer at London Capital Group said: ‘The stasis that markets had been stuck in has been well and truly broken with markets now looking likely to test the year’s lows.
In London, the FTSE 350 mining index lost 2.5%.
Investors are retreating from commodities as China’s economy expands at the slowest pace since 1990, with prices of raw materials on the Bloomberg Commodity Index including copper and zinc plunging last month to the lowest since the financial crisis as supplies outstrip demand.
There were more signs of economic weakness in China on Wednesday after data showed that Chinese manufacturing activity unexpectedly shrank to a 6 1/2-year low in September. Commodities were also hurt by a strengthening of the dollar, after US Federal Reserve officials signalled the world’s biggest economy could still raise interest rates this year.
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Weak summer trading at AG Barr also saw it alert over profits, with the group now expecting results broadly in line with the previous year.
