London open: Stocks decline on commodities slump

UK stocks declined on Friday morning as commodities reversed the previous day’s rally and investors awaited the release of gross domestic product data.

Anglo American, Fresnillo, BHP Billiton and Rio Tinto were the top fallers on the FTSE 100 as metal prices dropped albeit copper rose. Oil prices were also in the red, with Brent crude down 0.86% to $45.07 per barrel and West Texas Intermediate down 0.75% to $42.17 per barrel at 08:54 GMT.

The second estimate of UK GDP from the Office for National Statistics at 0930 GMT is expected to show an annualised 2.3% increase in the third quarter. On a quarter-on-quarter comparison, analysts predict unrevised 0.5% growth between July and September following a 0.7% gain in the second quarter.

“The UK economy is continuing to face a number of headwinds at the moment which are likely to persist into next year, most notably the strong pound and anaemic growth in the Eurozone, it’s largest trading partner,” said Craig Erlam, senior market analyst at Oanda.

“In the absence of either of these pressures easing, we could see growth remain at these decent, albeit uninspiring, levels in the coming quarters, which explains why the Bank of England is in no rush to raise interest rates. Especially at a time when the euro is depreciating as the ECB looks to ease monetary policy further, a BoE rate hike on top would exacerbate the strong currency issue even further.”

Elsewhere, Japanese data overnight showed an unexpected fall in the jobless rate to 3.1% in October from 3.4% the previous month, while the consumer price index rose to 0.3% year-on-year last month from 0%, as anticipated by analysts. However, CPI fell 0.1% year-on-year, as predicted, when stripping out volatile food prices.

Japan’s household spending dropped 2.4% in October, compared to forecasts of 0% and September’s 0.4% decrease. The reports come amid pressure on the Bank of Japan to increase its bond buying programme in the coming months following prolonged weakness in inflation.

“While Japan’s Jobless data improved, inflation showed need for continued BoJ stimulus,” said Michael van Dulken and Augustin Eden at Accendo Markets.

The Nikkei 225 fell 0.30% following the data. Chinese stocks were also sitting lower with the Shanghai composite down 5.49%, the largest daily percentage loss since 18 August. The declines in China came as authorities investigated brokerages Citic Securities Co. and Guosen Securities over suspected violations .

Meanwhile, the US stock market reopens but closes early at 1800 GMT.

Market Movers

FTSE 100 (UKX) 6,362.13 -0.48%
FTSE 250 (MCX) 17,175.77 -0.24%
techMARK (TASX) 3,215.22 -0.20%

FTSE 100 - Risers

easyJet (EZJ) 1,637.00p 0.61%
Rolls-Royce Holdings (RR.) 604.50p 0.50%
Severn Trent (SVT) 2,210.00p 0.36%
Relx plc (REL) 1,187.00p 0.34%
Capita (CPI) 1,271.00p 0.32%
Inmarsat (ISAT) 1,091.00p 0.28%
Admiral Group (ADM) 1,605.00p 0.25%
Experian (EXPN) 1,220.00p 0.25%
Dixons Carphone (DC.) 474.90p 0.23%
3i Group (III) 502.00p 0.10%

FTSE 100 - Fallers

Anglo American (AAL) 415.40p -4.68%
Fresnillo (FRES) 733.00p -2.14%
Rio Tinto (RIO) 2,225.50p -2.00%
BHP Billiton (BLT) 817.80p -1.85%
Antofagasta (ANTO) 509.00p -1.64%
Randgold Resources Ltd. (RRS) 4,112.00p -1.53%
Hargreaves Lansdown (HL.) 1,455.00p -1.42%
Standard Chartered (STAN) 558.80p -1.20%
Glencore (GLEN) 94.75p -1.18%
Aberdeen Asset Management (ADN) 339.70p -1.11%

FTSE 250 - Risers

Pennon Group (PNN) 867.50p 3.64%
PayPoint (PAY) 950.00p 2.76%
SVG Capital (SVI) 472.50p 2.70%
Supergroup (SGP) 1,592.00p 1.73%
Saga (SAGA) 216.60p 1.69%
Lookers (LOOK) 171.90p 1.54%
Zoopla Property Group (WI) (ZPLA) 223.00p 1.50%
Keller Group (KLR) 817.00p 1.49%
Betfair Group (BET) 3,648.00p 1.28%
Fidessa Group (FDSA) 1,960.00p 1.19%

FTSE 250 - Fallers

Fidelity China Special Situations (FCSS) 134.30p -3.03%
Ophir Energy (OPHR) 99.00p -2.37%
Just Retirement Group (JRG) 158.10p -2.35%
Weir Group (WEIR) 1,172.00p -2.09%
Jimmy Choo (CHOO) 141.60p -2.01%
Amec Foster Wheeler (AMFW) 430.70p -1.98%
Templeton Emerging Markets Inv Trust (TEM) 417.60p -1.76%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 463.00p -1.70%
Britvic (BVIC) 701.00p -1.68%
JPMorgan Emerging Markets Inv Trust (JMG) 557.50p -1.68%