Supermarket selloff weighs on sentiment

Heading into the close the FTSE 100 is down 45 points, as poor results from Morrisons triggered a selloff in the entire sector.

Morrisons admits shortcomings

Morrisons was hit by a massive write-down, and a lower guidance on future dividends hasn’t helped investor confidence. The struggling supermarket has acknowledged it needs to adapt to the new environment or get left behind.

Softer-than-expected economic announcements from China overnight added to the speculation that the country's central bank may need to relax its monetary policy. I feel Beijing should allow the economy to naturally gear down rather than adding fuel to the fire. 

Royal Dutch Shell has fallen out of favour with investors after it announced plans to reduce its investment in the North America by one fifth; the oil titan has to re-think its strategy for the profit-warning in January.

US feels slowdown in China

In the US, the Dow Jones is down 67 points at 16,272. US stocks are also feeling the effects of the slowdown in China but the situation in Ukraine is less of an issue the other side of the pond. An increase in retail sales and a drop in jobless claims failed to entice traders to buy into the market. 

General Electric has revealed plans to spin off retail finance business through an IPO. The jump in stock market flotations in the past 18 months is a sign of confidence in global equity markets.

Copper low, gold high

It is a tale of two metals today: copper is at its lowest in over four years due to the cooling in Chinese growth, while gold is at a six-month high on the back of the crisis in Crimea. 

NZ dollar beats Aussie

Australia had solid employment figures but it was no match for the increase in interest rates from the Reserve Bank of New Zealand. From its high in 2011, the Australian dollar has declined over 20% versus the New Zealand dollar; could parity be reached by the end of the year?

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.