Morning Spread

Morning Spread

Wednesday 12th August 2015
IndexLevelChg (%)
UK Market6566.67-1.47
Dow Indust Avg17402.84-1.21
S&P 5002084.07-0.96
Nasdaq Composite5036.79-1.27
Nikkei 22520392.77-1.58
Hang Seng23916.02-2.38
IndexLevelChg (%)
Nymex 1m43.25+0.39
Gold Spot1116.73+0.70
GBP/USD1.5572-0.01
GBP/EUR1.3990-1.01
EUR/USD1.1131+1.01
USD/JPY124.61+0.42

European shares continued their retreat this morning as concerns over China’s currency devaluation weighed on global stock markets and hit European exporters. The ESTX 50 (-2.42%), CAC 40 (-2.53%), Dax (-2.31%) and the UK markets (-1.41%) all posted losses in early trading. Rio Tinto Group, BHP Billiton Ltd, Antofagasta Plc and Glencore Plc all fell more than -2.8%. A gauge tracking UK miners looks like heading for its lowest close since 2009. Burberry Group Plc lost -3.1% as the devaluing yuan is expected to hurt earnings. Unilever Plc also declined -3.1% after Goldman Sachs Group Inc recommended selling the stock. Balfour Beatty Plc slid -1.5% after reporting a loss for the first half of the year. Henkel AG dropped -6.7% after reporting second quarter earnings that fell short of analyst estimates. Pearson Plc fell -0.9% after agreeing to sell its stake in the Economist magazine in a £469 million deal with Exor Spa.   

 

US stocks declined as China’s devaluation of its currency hit companies with a big exposure to China and added to worries about the global economic outlook. The Dow Jones Industrial Average (-1.21%), S&P 500 (-0.96%) and the Nasdaq composite (-1.27%) all declined. Apple Inc dropped -5.2% for its biggest daily percentage decline since January 2014, making the stock the biggest drag on all three major US indexes. Jefferies also raised concerns about the demand for the iPhone, primarily in China. Among other companies with big exposure to China, Caterpillar was down -2.6% and Yum Brands dropped -4.9%. General Motors shares lost -3.5%, though it said the devaluation of the yuan would have a limited and manageable impact on its business.

 

Asian stocks fell after China cut the value of the yuan for a second day, sending equity indexes across the region lower. The Nikkei 225 (-1.58%), Hang Seng (-2.48%) and the S&P/ASX 200 (-1.67%) all decreased. The move by China has sparked fears of a global currency war and accusations that Beijing was giving an unfair advantage to its struggling exporters. China Eastern and China Southern both slumped nearly -6%, while rival Air China lost -4.4%. But some Chinese exporters gained as investors hunted for companies that benefit the most from a weaker yuan. Luthai Textile Co, Shanghai Metersbonwe Fashion and Accessories Co and Hunan Mendale Hometextile Co all surged by their 10% daily limit.