Markets were lower on Friday, showing typical caution ahead of the monthly US unemployment report as some European stock exchanges came back online having been closed for Ascension Day.
The FTSE 100 was down around half-a-percent by mid-morning. A good showing for the generally more market-friendly Conservative Party in local elections has had little bearing on sentiment. A Labour Party wash-out that some were forecasting might have garnered a bigger market reaction.
A rebound in the price of gold off yesterday’s lows has helped gold-miner Randgold (LON:RRS) to the top of the UK benchmark whilst Inmarsat (LON:ISA) sank for a second day, leading the decliners.
Rio Tinto (LON:RIO) dropped over 1%, modestly outperforming a broader fall across the mining sector after confirming plans to invest into the Oyyu Tolgoi copper mine in Mongolia. There is some scepticism over the timing of the investment when copper prices sit near decade-lows. What’s worth considering is that this is one of the best under-developed projects. Initial production would start in 2020, by which time a shortage of copper supply from a pullback in capex across the industry is likely to have pushed copper prices higher.
Shares of ArcelorMittal (LON:0NSF) are lower after the world’s largest steel company posted another loss while forecasting a ‘fragile’ rise in steel demand. Excalibur Steel is speaking with bankers for funding to buy Tata Steel's (NS:TISC) UK operations. Bank-supported funding would address one of the major obstacles to Excalibur’s bid but plans to offload the pension scheme to the taxpayer-backed PPF likely needs to be scrapped before a deal would be acceptable. Liberty House looks like a more stable buyer than the make-shift consortium of management and other interest partiers. The risk with Liberty House is that it ends up being more of the same failed approach.
Japan’s Nikkei dropped for a sixth straight session, its worst run since the global sell-off at the start of the year. There was some optimism surrounding the appointment of a new CEO at Toshiba (T:6502). Mr Tsunakawa did well at Toshiba’s healthcare unit and his detachment from the accounting scandal means he can bring an untainted perspective along with an understanding of the business.
US markets look set for lower start before non-farm payrolls with Warren Buffet’s Berkshire Hathaway (NYSE:BRKa) set to report earnings.
USA pre-opening levels
S&P 500: 4 points lower at 2,046
Dow Jones: 39 points lower at 17,621
Nasdaq 100: 10 points lower at 4,299
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