The End Of A Negative Week
After an indifferent week UK shares finished with a negative bias, dragged down by technology companies after a sharp sell-off in the USA, especially seen in the tech laden Nasdaq, which slumped 3.1% over the course of last week.
The fall in the Nasdaq was the largest since 2011, with speculation that investors are dumping momentum stocks, with concerns over high valuations as we approach earnings season. Heavy-weights such as Google, Yahoo and Netflix all gave in, and continued with the losses made early week.
In the UK, poor Construction output data did nothing to help the cause, as a fall for February was attributed to bad weather conditions. The office for national statistics announced a 2.8% fall in February, compared with a 2.1% rise in January. Construction is a major part of UK GDP, accounting for around 6.3%.
Although the markets were on the slide across the board, many are calling it the “holiday effect” with shortened weeks upcoming, and many institutions are looking to be flat over the period.
Of the gainers in the FTSE 100, Fresnillo held firm. With JP Morgan lifting its forecast for the metal producer, and stating:
“We estimate Fresnillo should continue to enjoy lower average costs, aided by the high-quality Saucito II and San Julian projects. Over the next 10 years, we estimate an average all-in sustaining cost of $13.5/oz for Fresnillo, versus $19.2/oz for Hochschild.”
Supermarkets were holding firm too (just), with WM Morrison and Sainsbury posting small gains in a tough market. On the other hand Tesco felt the negative push, after announcing it was to launch a “high street takeaway” chain.
ARM Holdings felt the pain of the Nasdaq, ending the day lower at 958.50 along with Sports Direct continuing the early week falls after Mike Ashley announced his sale of up to £200 million worth of shares.
Currency Articles - Oct 23, 2015 9:50 - 0 Comments
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