Shares closed lower today with the mining sector bearing the brunt of selling pressure.
The FTSE100 was 70.8 points lower at 5,841.3 with the FTSE250 down 254.5 points at 9,557.3 and the FTSE Smallcaps 123.3 points lower at 3,489.7.
Volume was very good.
Oil prices lost almost 2 usd on continued concern regarding record prices hurting demand growth and could eventually slow the global economy. The falls were in line with losses across the commodities complex, led by copper and zinc.
June-dated Brent contracts were down 2.32 usd at 70.00 usd, having lost 1.11 usd to close at 72.32 usd on Friday. Meanwhile, June-dated US light crude futures were down 2.49 usd at 69.55 usd.
Precious metals took a hammering with June gold falling to a low of $686.70 an ounce in New York Monday morning trade, its weakest level since May 9th. Meanwhile, July copper was off 20.4 cents at $3.66 a pound in US trade.
Following Friday’s mass selling, things have been no different today. Therefore, the Footsieblog advises all small holders to close profitable positions now and wait until things settle down.
Today’s look at individual Stocks:
Anglo-Swiss miner Xstrata dropped a staggering 8% or 202p to 2,208p, after weekend press reports linked the group with a bid for Falconbridge, the copper and nickel miner listed in both the US and Canada. The move comes after rival Inco yesterday raised its offer for Falconbridge to $17.7bn.
Continuing with M&A activity, Saturday's Daily Mail Market Report noted strong old lady rumours that mining peer Rio Tinto had recruited financial advisers to investigate a possible bid for US metals giant Phelps Dodge. Rio Tinto dropped 154p to 3,028p, with Kazakhmys down 111p at 1,204p and Antofagasta down 169p at 2,273p, BHP Billiton down 66p at 1,102p and Anglo American down 143p at 2,282p.
Oil stocks were also out of favour as crude prices dropped below $71 a barrel, still pressured by the International Energy Agency's decision on Friday to cut its oil demand growth forecasts for this year due to the high oil prices. Falls were limited, however, by continued concerns over the Iranian nuclear standoff and militant threats to oil installations in Nigeria.
BP shares were down 13.5p at 646p, Shell lost 21p to 1,858p and BG Group fell 13.5p to 691p.
Elsewhere, dollar-exposed stocks remained under pressure with Wolseley extending falls to trade 47p down at 1,242p, Man Group was 121p down at 2,400p, Rolls-Royce 12.25p lower at 431p and Pearson down 9p at 740p.
Vodafone bucked the trend of the last two days and pushed 1.5p higher to 125.25p after The Observer claimed US firm Verizon is poised to buy the company's stake in its Verizon Wireless joint venture for about $48bn. Vodafone also benefited from news of a target price hike to 153p from 145p by UBS today.
BT Group also moved higher, up 5.5p to 216p, ahead of full-year results on Thursday, as the Sunday Telegraph argued the telecoms group was undervalued by 36% and raised the spectre of a private equity bid. Hopes have also intensified that BT, which once had the largest pension black hole in the FTSE100, will reveal it has cut its deficit to just over £1 billion.
Most of the Footsie stocks continued to close down today.
The Portfolio:
Due to the current situation on the markets the Footsieblog has sold most of the portfolio except for the following stock:
Wolfson (WLF) – This stock I believe still holds good value and the drop is now over done.
The rest of the portfolio has been sold to protect profits. Once the markets have settled down the Footsieblog will buy certain stocks back again. We shall keep you informed.
