End of quarter jitters
Glencore (LONDON:GLEN) falls most on record
Automakers lower on emissions scandal
Government shutdown threat continues in US
The boost in sentiment from US Fed Chair Janet Yellen’s comments on Friday hasn’t lasted too long. Every jump or slump in the market is being used by jittery investors to reposition portfolios at the end of the quarter. European shares opened on the back foot on Monday with commodity, telecoms and automotive stocks all driving benchmarks lower.
The most spectacular fall was from shares of out-of-favour Glencore which fell over 17% for the biggest drop on record. A broker note suggested commodity prices at current levels would mean all Glencore equity could be lost against its hefty debt pile. Industrial metal prices are only slightly lower on the day but the panic hitting Glencore shares has hit the rest of the mining space with Anglo American (LONDON:AAL) down by over 5%.
Shares of Royal Dutch Shell (LONDON:RDSa) were in the red, hovering close to six year lows after an exploration project in the Alaska came up dry.
The emissions scandal is starting to look like a real albatross around the neck of the automotive sector. Shares of VW, BMW and Peugeot well all dropping gain on Monday. The choice of Matthias Mueller as new VW chief is a positive first step to address the emissions scandal but the concern is that the selection of the Porsche CEO is too insular and won’t provide the kind of culture change needed.
Tesco’s planned sale of its Poland, Hungary and Slovakia operations was not enough to undo concern that Aldi will further erode the market share of the top four supermarkets with its intended entry into UK online shopping.
Shares of SAB Miller were atop the FTSE 100 with gains of over 3% on rumours AB InBev may be about to make its takeover offer as early as today.
The resignation of House of Representatives Speaker John Boehner appears to have done little to reduce the threat of a US government shutdown. Republicans are still gunning for a showdown with US president Obama over the funding of Planned Parenthood. Shares in the US are set to open lower on Monday.
USA pre-opening levels
S&P 500: 9 points lower at 1,922
Dow Jones: 64 points lower at 16,250
Nasdaq 100: 19 points lower at 4,205.
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