FTSE 100 tumbles as Osborne pulls Lloyds share sale amid ‘turbulent’ market conditions – live

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11:08

Best week for Anglo American since October

Anglo American is on track for its best weekly performance since early October after it revealed it increased production at its Minas-Rio mine in Brazil.

So far this week the FTSE 100 stock has made gains of more than 20pc.

Jon Yeomans writes:

The falling price of metals and minerals has not deterred Anglo American from stepping up its output.

The embattled FTSE 100 miner, which is in the midst of a radical plan to shrink in size by almost two-thirds, increased its production by 5pc in 2015.

The bulk of that increase was down to a 25pc rise in platinum production during the year – despite the price of the precious metal tumbling by around the same amount amid a supply glut.

Read more here

10:53

Gold climbs on safe-haven demand

Demand for safe-haven assets continues to drive the price of gold higher amid persistent concerns about the state of the global economy. Gold climbed 1pc this morning to $1,128.16. In its wake FTSE 100 gold miners Randgold Resources and Fresnillo also found support – up 0.8pc and 1.3pc, respectively.

Mike van Dulken, of Accendo Markets, said: “Gold is back testing rising support again having come back from a test of $1127 yesterday. We’re still looking for a decisive break above $1123.”

He noted that “a 3-month bullish rounding (‘saucer’) bottom reversal” is taking form with potential for upside to $1160.

10:38

FTSE turns negative (again)

It looks set to be another unpredictable trading session.

After punching ahead to cross the 6,000 level in early morning trade, the FTSE 100 has since turned negative and is currently down 0.43pc (or 25.59 points) at 5,964.

Augustin Eden, of Accendo Markets, said a “pull back” is to be expected, given that none of the global drivers of volatility have changed.

10:24

Emerging markets hit two-week high

Emerging markets equities advanced today hitting a two-week high on the back of the Fed’s cautious tone and firmer oil prices.

The MSCI emerging markets index rose 0.65pc, lifted by gains in Russia and South Africa.

Chris Beauchamp, of IG, said: “The ongoing rally in crude is helping the mood – up days for this commodity tend to lead to gains for stock markets, but it would be unwise to declare the end of the slump in crude prices just yet.”

10:18

Yen jumps on resignation of Japan’s economy minister

Currency markets were impacted after Japan’s economy minister resigned amid allegations, he denies, that he received bribes from a construction company.

Akira Amari’s resignation came after the Nikkei closed (which finished down 0.71pc) and caused the yen to rise against the dollar.

10:12

Choppy trading in India

It was another choppy trading session for India this morning as the Fed kept interest rates unchanged and as investors churned their positions on the last day of the January derivatives contracts.

The benchmark NSE index slipped 0.4pc earlier in the session, before clawing its way back into positive territory – up 0.2pc.

10:00

UK economy expands by 0.5pc in Q4

In the final three months of 2015, the UK economy by 0.5pc – up from 0.4pc in the third quarter and in line with expectations.

Ben Brettell, of Hargreaves Lansdown, said: “Your interpretation of today’s GDP figures will depend on whether you take a ‘glass half full’ or a ‘glass half empty’ view of the UK economy.

“The bigger picture is that growth remains lacklustre, but reasonably resilient. A slowdown in emerging markets combined with increased uncertainty in global financial markets was bound to weigh on growth, but the domestic economy remains in reasonable health despite these headwinds.”

Meanwhile, Connor Campbell, of SpreadEx, said: “The GDP figure helped steady early gains on the FTSE 100.” However, Mr Campbell warned the gains may have quickly disappeared if the GDP figure came in below the 0.5pc mark.

Read more here

09:40

Russia’s business sentiment falls into contraction

Russia’s business sentiment has contracted this month due to the weakness in oil and the rouble.

The MNI Russia Business Sentiment Indicator fell to 41.3 in January from 50.0 in December, leaving it not too far off the record low of 37.1 recorded in November, according to Deutsche Börse Group, who compiles the MNI indicators data. Sentiment is now 16.1% down on the year.

MNI Russia Business Sentiment is a monthly poll of Russian business executives at companies listed on the Moscow Exchange.

Philip Uglow, Chief Economist of MNI Indicators said, “The latest survey showed business sentiment falling sharply as concerns over the weakness of the Russian rouble mounted and credit channels tightened further. It’s no secret that Russia’s fortunes are tied to the oil price and it’s difficult to see things improving unless we see a recovery in prices and stabilisation in the currency.”

09:36

Mixed scenes in Europe

European shares have wobbled this morning, swinging between gains and losses an hour-and-a-half into trading.

Disappointing earnings results from Roche weighed on the healthcare sector, while oil and gas stocks and miners have rallied after oil edged up despite a fall in Chinese stock markets.

The FTSE 100 advanced 0.04pc (3 points), while the DAX in German slipped 0.34pc and the CAC in Paris lost 0.03pc. In Spain, the IBEX added 0.19pc to 8,757.20.

Stoxx600 biggest risers

09:30

Saudi stocks steady

The Saudi Arabian benchmark TASI index climbed 2.1pc this morning as oil prices remained above the $33 a-barrel mark after Russai said they should to the region about output cuts.

09:20

Brent crude stays above $33 mark

Oil prices rallied yesterday after Russia said cooperation with major oil producers had been discussed.

Today Brent crude has managed to stay above the $33 a-barrel mark – up 0.27pc to $33.18.

Lewis Sturdy, of London Capital Group, said: “Oil consolidated gains in a tight range around $32. Above $30/29.50, we may see a further recovery to $34.00/34.50.”

However, Mr Sturdy warned “downside risks” may prevail however and “the risk of a slide back below $30 is considerable.’

09:09

Volatility is ‘set to continue’

European markets had a firmer start this morning, following Asia’s torrid trading session, Andy McLevey, of Interactive Investor, said:

“Europe markets opened easier in early trading tracking the fall on Wall St as despite expressing concern at slow economic growth abroad and turbulence in financial markets the Fed statement suggests they still plan to raise interest rates this year and although a March hike seems unlikely in current market conditions it has not been ruled out.

“The volatility of late is set to continue as investors digest a raft of economic and corporate news which could set us up for a choppy session and may present some opportunities for investors hoping to snap up any bargains.”

09:00

FTSE climbs above 6,000 level

Britain’s benchmark index has touched a two-week high this morning, rising above the 6,000 level to 6,012.40 in the first half hour of trading.

08:45

European stock markets steady after shaky start

European bourses opened in negative territory before quickly turning positive after a choppy trading session in Asia and sharp losses on Wall Street.

FTSE +0.12pc

DAX +0.09pc

CAC +0.34pc

IBEX +0.49pc

08:40

Global turmoil to keep US interest rates on hold

A recap of the policy statement from the Fed which was released last night.

Economics correspondent Peter Spence writes:

The Federal Reserve has signalled that it will be cautious in raising US interest rates, as fears over the global economy and uncertainty over oil prices have jolted investor confidence since the beginning of the year.

A renewed rout in oil prices will mean that inflation will take longer to reach the central bank’s 2pc target, policymakers admitted, noting that investors believed price growth would be muted in the wake of the recent falls.

The Federal Open Market Committee (FOMC), which decides on US interest rates, said that it would not raise its rates this month, adding that it would be “closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation”.

Read more here

08:35

Another selling frenzy triggers sharp fall in Chinese stocks

Chinese stocks closed at a fresh one-year low overnight after another round of panic selling.

The CSI300 lost 2.6pc, while the Shanghai Composite Index tumbled 2.9pc.

The volatile trading session in Asia followed a disappointing close on Wall Street, where the Dow Jones finished down 1.4pc and the Nasdaq slumped 2.2pc. The finger was pointed at the Fed for Wall Street’s torrid session, as investors attempted to interpret the policy statement.

Investors remained on edge as the central bank failed to show enough concern about the state of the global economy, and left all options open, including another rate hike in March.

Chris Beauchamp, of IG, said: “Markets got the more dovish tone they were hoping for, with the Fed noting slowing economic growth and tipping its hat towards the idea that inflation won’t rise towards 2pc as fast as it thought in December.

“This doesn’t mean a March move is out of the question, but the reference to global economic developments means that there will have to be plenty more improvement in the US economy before one is a definite possibility. With the risks to the economy no longer seen as ‘balanced’ this is a Fed committee drawing in its horns. It was never going to admit that December’s move was a mistake, but today’s statement acknowledges that it is not time to get carried away with rate hikes.”

Oil also retreated from earlier highs. Brent is currently changing hands at $33.17 a-barrel.

Shanghai Composite Index one-day graph (Source: Bloomberg)

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