Growth concerns re-emerge after German factory orders drop
FTSE falters after break of 6300
BP (LONDON:BP) reaches spill settlement
Supermarket rise before Tesco (LONDON:TSCO) earnings
Easyjet passenger numbers up
SAB Miller revenue drop poorly received
European markets came off the boil in early trade on Tuesday as elation over a longer period of low interest rates and rising oil prices gave way to growth concerns when data showed Germany’s factory orders surprisingly fell in September.
The FTSE 100 had broken through 6,300 to make new 6 week highs but faltered as energy and mining companies which had led the advance, slipped back alongside commodity prices. Bullish comments from OPEC’s El Badri suggesting a cutback in capex will increase oil prices fell on deaf ears as concerns over weak global growth dominated investor’s mindset.
News that BP can draw a line under its long running oil spill saga with an agreed $20bn settlement removes a lot of uncertainty surrounding the company. The settlement just couldn’t come at a worse time when revenues have been badly beaten up by the drop in the price of oil.
Supermarkets were a bright spot on the FTSE with speculation building that Tesco’s half year earnings update can match the positivity generated by Sainsbury’s surprise upgrade to profit forecasts.
Upbeat passenger number from EasyJet reaffirmed the airline’s recent upgrade to its full year profit guidance and helped shares trade higher. IAG (LONDON:ICAG) shares were top risers as EasyJet’s passenger numbers pointed to good times ahead for the airline industry and the shirt-ripping antics at Air France can only serve to boost competitor advantage for the likes of BA.
SAB Miller shares fell after it announced a drop in revenues in the last quarter, taking it towards the bottom of the FTSE 100. The brewer saw a 2% rise in sales volumes in the three months through September driven by emerging markets but the depreciation of local currencies erased the revenue growth. AB Inbev has not officially made a takeover offer yet so SAB Miller’s revenue drop dampens the chances just a little.
US stocks look set for a lower open on Tuesday, pausing after strong positive momentum over the past two days that took the S&P 500 to just shy of the 2000 level.
USA pre-opening levels
S&P 500: 6 points lower at 1,981
Dow Jones: 22 points lower at 16,754
Nasdaq 100: 19 points lower at 4,312
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