Concern over China’s growing ‘debt-mountain’ and Japan’s inability to face reality in terms of its sluggish economy, gargantuan debt, its strong Yen and ludicrous stimuli facilities saw Asian markets lower. These facts were aided and abetted by lower commodity prices and oil dropping 1%. It was ANZAC day; so Australian markets were closed.
So perhaps it was unreasonable to expect the FTSE 100 to open in positive territory, contrary to early estimations.
Investors lost no opportunity to take more profits on mining and oil stocks, taking the FTSE 100 down 33 points to 6277 at 10.30am. In the back of punters’ minds will be the memory of an inauspicious end to the 2nd quarter earnings posted last week. Microsoft lost 7.17% and Alphabet -5.3%. I doubt Janet Yellen and her cohorts on the FOMC will find much meat to put through the slicer to justify a rate hike either on Wednesday or June.
Mining stocks shed an average of 3% and oils 2%. Banks ahead of this week’s earnings, which I doubt will want shareholders to indulge in gleeful backward summersaults, were looking rather dreary – Standard Chartered -2.75% (tomorrow), HSBC -1.5% (next week), Lloyds -0.5% (Wednesday), Barclays unch (Thursday) and RBS -0.25% (Friday). Keep an eye out for increased capital costs, PPI claims, regulatory fines and increased impairment charges particularly in the energy sector. RBS may post a loss of £950 million for the 1st quarter, up from £446m last year.