FTSE falls as oil prices plunge, IMF boss predicts ‘disappointing’ global growth
Britain’s FTSE index closed lower Wednesday, amid falling oil prices and a warning from the head of the International Monetary Fund (IMF) that global growth next year would be “disappointing”.
IMF managing director Christine Lagarde said the prospect of further interest rate hikes in the US and an economic slowdown in China contributed to uncertainty and helped slow worldwide growth.
The FTSE 100 Index fell 40.5 points to 6274.1, giving back most of yesterday’s gains amid thin trading and little corporate news following the Christmas break.
Germany’s DAX is 1% lower, while the Cac 40 in France is down by 0.5%. In New York the Dow Jones Industrial Average is 37 points lower in early trading.
The pound is slightly up against the US dollar at just over 1.48, with little economic data to trade on. Sterling is marginally higher against the euro at just under 1.36.
Brent Crude gave up yesterday’s gains falling more than a dollar to 36.66 US dollars, remaining close to an 11-year low hit earlier this month.
Oil prices are on course to fall by more than a third this year as big suppliers such as Saudi Arabia and Russia have continued pumping crude in a bid to defend their global market share.
BP was 5.6p lower to 355.2p, while Royal Dutch Shell was down 16p to 1563p.
By contrast, large users of oil were higher with British Airways owner International Airlines Group up 4.5p to 614p and cruise ship operator Carnival climbing 17p to 3891p.
Online grocer Ocado was a big faller in the FTSE 250, down more than 3%, or 10.9p to 315p, after US rival Amazon said it will expand the range of its UK delivery service for households goods and groceries as it prepares to take on supermarkets in the new year.
Online retailer Amazon’s Pantry service – which was launched in Britain in November – will be beefed up in 2016, adding new products to its 4,000 existing lines, said the firm’s British boss Christopher North in an interview with The Guardian.
Back in the top flight, Sainsbury’s was down 3.2p at 261.7p and Tesco was 0.6p lower to 150.6p.
Asia-focused banks Standard Chartered and HSBC were down 14.7p to 566.1p and 6.8p to 537.8p respectively, after China suspended three unnamed foreign banks from conducting some foreign exchange business until the end of March, according to news agency Reuters.
The report said included among the suspended services are liquidation of spot positions for clients and some other activities related to cross-border, onshore and offshore businesses.
The move comes after a series of steps taken by Beijing to keep the yuan stable since it devalued the currency in August.
The biggest risers in the FTSE 100 Index were Antofagasta up 11.4p at 472.1p, Worldpaly up 3.7p at 307.7p, International Airlines Group up 4.5p at 614p and Next up 40p at 7275p.
The biggest fallers in the FTSE 100 Index were Glencore down 3.3p at 89.8p, Hikma Pharmaceuticals down 66p at 2292p, Standard Chartered down 14.7p at 566.1p and Royal Bank of Scotland down 7.3p at 302.8p.
Source: Belfast Telegraph
