FTSE resists bigger selloff
Fiona Cincotta June 12, 2020 6:11 AM
The FTSE is trading lower but it is a mild decline compared with the DJIA’s nearly 7% loss last night and the S&P 500’s nearly 6% drop.
The FTSE is trading lower but it is a mild decline compared with the DJIA’s nearly 7% loss last night and the S&P 500’s nearly 6% drop. Impressive rallies from publishing firm Pearson and events organiser Informa balanced out the relatively smaller dips in the mining sector.
Overall, the London index held up fairly well even though the latest UK economic data showed how much damage the country took from the coronavirus in April. Britain’s economy shrank by 20.4% from March, courteous of the virus lockdown, and contracted 24.5% compared with the same month last year, an even lower reading than most analysts had expected.
Precious metals miners Polymetal, Fresnilllo and platinum specialist Johnson Matthey took the brunt of the selloff this morning, with the selling instigated by a drop in gold prices.
But publisher Pearson balanced out the declines with a 10% jump after it was revealed that activist investor Cevian Capital has built up a stake in the firm. Exhibitions firm Informa also gained close to 10% after the company said it will go back to ogranising events in China from July.
Investors in the travel sector keep going back and forth trying to gauge how much recovery there is for travel firms. This morning cruise and airline firms were back in positive focus following a selloff Thursday.
Oil prices again in a downward spiral
As the overall short term trading optimism faded in the US so did the enthusiasm in the oil market. US oil inventories rose again this week, and by a generous number, as oil shipped from Saudi Arabia before the OPEC agreement to cut production from May is still being offloaded in the US market. But demand there is struggling to keep up with the additional supply as the easing of the lockdown is happening at a slower pace than investors have hoped for.
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