Morning Spread

Morning Spread

Thursday 30th October 2014
IndexLevelChg (%)
UK Market6418.76-0.55
Dow Indust Avg16974.31-0.18
S&P 5001982.30-0.14
Nasdaq Composite4549.23-0.33
Nikkei 22515658.20+0.67
Hang Seng23702.04-0.49
IndexLevelChg (%)
Nymex 1m81.27-1.13
Gold Spot1204.78-0.60
GBP/USD1.5989-0.66
GBP/EUR1.2706-0.47
EUR/USD1.2582-1.18
USD/JPY109.05-0.83

US equity markets dropped modestly on Wednesday as investors reacted to the formal announcement by the Federal Reserve of the ending of the QE stimulus programme. The more optimistic view on the economy was interpreted as interest rates rising sooner than expected. Financials were mixed with Bank of America rising 1.1% on its exposure to the consumer market, whilst JP Morgan lost 0.57%. In the Technology sector, the stand out feature was the 6% fall in Facebook. Despite the social networking giant reporting earnings and revenues that were better than expected, the company warned of much higher spending on acquisitions in the coming year. Other fallers included Mondelez down 1%, Toll Brothers down 1.4% and Newmont Mining down 4.76%. Gainers included Abercrombie & Fitch up 2%, China Mobile was up 2.2% and Ultra Petroleum was up 1.7%.

In Asia overnight, there was a reasonable rise in most markets with the Nikkei up 0.67% and India was up 0.9%. Shanghai stocks were also in positive mood as early steps were made to boost the trading link with the Hong Kong exchange. There were some fears over Chinese company earnings growth however and PetroChina lost 2% and ICBC fell nearly 1%. In Australia, Coca-Cola Amatil rose 4.5% on a positive growth outlook, whilst Flight Centre fell nearly 3% on a poor outlook from the CEO. In South Korea, Samsung Electronics jumped nearly 5% on positive Q4 profit news. In Japan, Keyence Corporation rose to a record, up 5.8%, after results beat expectations and the dividend was boosted. Yahoo Japan however, fell nearly 6% on a profit warning.

Europe is weaker in trading on Thursday as investors digest the Fed news and the subsequent strength in the US$. In the UK, Barclays is up just over 1% after reporting an unexpected jump in third quarter profits. This is despite setting aside an additional £500 million for the settlement of the currency rigging probe. Precious metal prices are weak with Randgold Resources down 3%, Anglo American down 2.75% and Fresnillo down 2.15%. In Germany, Linde AG is down 5%, after the largest manufacturer of industrial gases in the world issued a profit warning. Lacklustre European growth and slowing manufacturing growth were cited as the main factors. Other decliners include Den Norske Bank down 1.12%, Statoil down 2.52% and Seadrill down 3.48%.