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FTSE sees largest drop since October

Profit warnings and global equity market selloffs drive the FTSE 100 lower, as it looks set to have its biggest drop since mid-October. 

City of London
Source: Bloomberg

Tesco's struggles continue

On a day where crude oil traded below $67 a barrel and gold broke back above $1230, it was going to take something special for a commodity stock not to be the headline act. Step forward Tesco! Four profit warnings within the last twelve months have seen the company’s value half; not the way new CEO Dave Lewis would have wanted to celebrate his 100th day in the hot seat.

Regardless of the major technical support levels reached, the hurdles of the ongoing FSA investigations and the crucial Christmas sales period have seen raging debates on trading floors over the company’s status as either the seasons must have buy or an end of range product heading for the bargain bucket.

Offering a little light on an otherwise gloomy day is Randgold Resources, heading higher as gold advances, driven by the aggressive selloff seen in all the major equity indices.

Dow loses ground

The Dow Jones is down 164 points at 17,688 as the US has been unable to escape the negative sentiment sweeping across global equity markets.

The political uncertainty in Athens can be felt in Wall Street, as financial stocks are thrown into turmoil by Antonis Samaras' snap election which prompted traders to dump banking stocks.

If there is ever a time to ensure your banking system is adequately financed it is right before another possible round of the eurozone debt crisis. The Federal Reserve is getting its house in order by ensuring US banks can cope under severe circumstances.

ConocoPhillips is higher today after the company revealed plans to cut back on capital expenditure yesterday. It is the first major US oil company to reshuffle some of it projects in light of the declining oil prices.

Gold pushes through $1,220

Gold prices have surged heading into the London close following a widespread softening in global indices, continuing a two-day loss, which has again brought global growth concerns to the fore. It has begun to regain its shine after benefitting from a sharp turnaround in global risk sentiment that has now begun to favour the safe-haven asset. The yellow metal smashed through its $1,220 level that acted as long-term resistance for some time, pushing to a high of $1,238 on the day.

WTI prices continued to head lower today, again, on the back of global deflationary concerns, returning to its 2009 level of $62.25/barrel.

Yen surges

Widespread support for the Japanese yen resulted in a surge against the majority of its major counterparts – a move that is being sustained into the London close with the biggest decline seen in USD/JPY, which has undone a week’s worth of a bull-run in an afternoon. It is currently down -1.55% on the day at $118.74, having been as low as $117.94 – a level which has previously acted as an area of consolidation.

The USD was among the day’s worst performers against the majority of its major counterparts despite a positive print in US JOLT’s data that came in at 4.834m, up from its previous level of 4.685m month on month.

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