The FTSE100 is expected to open nearly 50 points lower this morning after global equity markets and commodity markets weakened overnight.
Yesterday in London weaker natural resource stocks, weighed by lower commodity prices, were offset by gains for finance and pharmaceutical stocks. Tuesday’s top performers were City firm Man Group (LON:EMG) who gained more than 3 percent, followed closely by Reckitt and Benckiser (LON:RB.) gaining 3 percent.
Then after a topsy-turvy session the Dow Jones Industrial Average - the US blue chip benchmark index – finished practically where it started on Tuesday, up just 0.15 points at 12,807.51.
The S&P slipped 4.6 points, about 0.34 percent, to sit at 1,356.62 while the NASDAQ dropped 0.78 percent to 2,841.62.
Pfizer’s (NYSE:PFE) financial results, which revealed revenue that came up short against the street’s expectations, was one of the main features of the trading day. The major drug stock flopped 58 cents, or 2.8 percent, lower to US$20.44 a share.
Another top story in the US centred on market speculation the Rio Tinto (LON:RIO, ASX:RIO) was in talks to buy American aluminium firm Alcoa (NYSE:AA).
American retail group Sears Holdings (NASDAQ:SHLD) – the parent of the Kmart brand – shed nine percent after it warned investors that it would report a quarterly loss because of a recent decline in sales.
Elsewhere weaker commodity prices cast a shadow over equity markets with subdued trading in mining and energy stocks.
Overnight Asian markets and commodities fell as investors grew increasingly cautious over the possiblility that China could be set to take action to kurb inflation.
Reportedly the People’s Bank of China warned that managing inflation and stabilising prices are critical. Fellow BRIC nations India and Brazil are also said to be considering their stance on managing inflation.
The US dollar climbed against the Australian and the New Zealand dollar, as well as emerging Asian currencies.
The MSCI Asia Pacific ex Japan – the Nikkei is closed for the ‘golden week’ public holiday in Japan – fell 6.38 points, or 1.25 percent to 502.45.
In Australia the S&P/ASX200 index slipped 47 points, or 0.9 percent, to 4,737.20.
Commodity prices eased again with oil falling as investors’ eye weaker demand while ‘spot’ gold prices were lower again down US$4.40 near US$1,530 an ounce. Silver prices fell further losing US$0.47, about 1.5 percent, to US$41.20.
West Texas Intermediary (WTI) crude oil - oftern referred to as US light sweet crude - futures were down US$0.23 to US$110.82.
Meanwhile base metals also fell with copper and nickel prices losing over 1 percent to trade at US$4.20 and US$12.02 per pound respectively. Zinc and lead both slipped over half a percent while the price of aluminium was up marginally.
In London this morning the bookies and spreadbetters are predicting a lower open, with the FTSE futures predicted to open nearly 50 points lower at around 6,032.