FTSE opens almost flat as earnings pull in different directions
The FTSE and European indices opened close to the flat line this morning, somewhat directionless as company earnings pulled in two different directions and Chinese news and data cancelled each other out.
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On the never ending trade tariff front the US said it will start charging 25% tariffs on an additional $16 billion worth of Chinese goods from 23 August. This is only a portion of the planned US tariffs which will extend to $60 billion of goods from China. Chinese shares nudged 0.4% lower on closing, in contrast to other Asian stock markets which have closed up four days in a row. The new set of tariffs cancelled out strong Chinese trade data, which showed that exports increased more than expected in July despite the first set of US tariffs which came into effect last month. Perhaps more significantly Chinese imports rose further than expected which indicates strong domestic demand and a resilient state of the economy, something that is crucial for the state of the global economy.
Glencore traded heavily post results
Metals and mining giant Glencore is the heaviest traded company in the FTSE this morning after it reported a 13% increase in net profit this year on the back of higher metals and raw materials prices. The market is still making a judgment on the results – shares are down 0.25% because the profit increase came in below consensus forecast but this doesn’t detract from the fact that the company generated nearly record high profits mainly from the sales of copper and zinc. Glencore’s share price may end up capped over the coming months while the company remains under investigation by the US Department of Justice over money laundering issues and faces political risk in the Democratic Republic of Congo.
Pound still under pressure
The pound is continuing to look fragile against the dollar and the euro with the Brexit spectre still hanging over its head. The currency slipped 0.22% against the dollar and 0.15% against the euro in early trading amid a lack of positive news to boost its position.
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