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London open: Stocks fall on commodity slump
UK stocks opened in negative territory on Monday as a commodity slump continued to provide a drag.
While the week is set to see a raft of important events – including the European Central Bank’s policy decision and the US non-farm payrolls report – Monday had a slow start.
The only notable UK release will be figures on mortgage approvals for October at 930 GMT, with the focus on the mining sector.
“Not that the oil and mining stocks are as bad as normal, but rather that with little else on offer, and iron ore falling to a five-month low, the UK index couldn’t manage to mitigate its 45 point drop as the day got underway,” said Connor Campbell, financial analyst at Spreadex.
Elsewhere, German inflation data is due at 1300 GMT and US pending home sales will be published at 1500 GMT.
Meanwhile, China’s yuan is expected to be unveiled this week as the newest member of the group of currencies which the International Monetary Fund includes in its special drawing rights, possibly foreshadowing further weakness in the currency. The IMF was believed to be planning to make the announcement about the Chinese currency on Monday. If the decision went ahead, it would mean that the yuan would reach reserve status some time next year, according to some observers.
On the company front, Cranswick rallied after the food producer reported a 9.9% increase in half year revenue to £529.1m and a 22% jump in pre-tax profit to £31.5m.
Aberdeen Asset Management declined as the investment management group said full year underlying pre-tax profits rose only slightly to £491m from £490m due to the slump in Asian and emerging market equities.
IG Group climbed as it said revenue in the second quarter of the financial year would be slightly ahead of the first, although it is too early to predict how the full year will turn out.
BHP Billiton slid amid news its news joint venture with Vale is expected to be launched today, after two dams were breached at the beginning of the month.
Carillion fell as the support services group has renewed its main revolving bank facility and extended the maturity by nearly three years, from March 2018 to November 2020.
