Although the FTSE started the day on a slightly higher note, 0.7% at 7,726.78, looking at the up and down bounce in the index this morning it is not at all clear that the upward trend will continue.
The opening was positive enough –Italy’s political frictions have ebbed slightly as the country is about to get new cabinet after months of deadlock. The Italian stock market also opened up 2.4% as economist Giovanni Tria gets ready to take on the position of the new economic minister. Unlike the previous candidate for the position Tria, though critical of the EU economy, has not come out in favour of abandoning the euro.
The euro traded flat to marginally higher this morning, up 0.02% against the dollar. The pound was a touch lower against the common currency at €1.1367, down 0.04%.
But the euro will have no peace today with Spain’s prime minister facing a vote of no confidence over implications in a corruption case. Market watchers expect him to lose the vote and new elections to be called shortly after.
Mining companies rally
Mining companies and metals companies in the FTSE 100 are all on a rise this morning, a counter-intuitive move given that the US threatened Thursday to start charging 25% tariffs on imports of aluminium and steel from Europe, Canada and Mexico.
Platinum specialist Johnson Matthey rose 3.59% to 3,641.50 despite reporting a decline in operating profit and pretax profit. Though the company did increase its dividend to 80 pence from 75 last year, its revenue will remain under pressure because platinum prices declined significantly over the last few months. Gold and platinum producer Anglo American traded 2.76% higher at 1,846.60 while Rio Tinto, Glencore and Chilean miner Antofagasta were also among the top ten movers higher.
Putting it in the context of potential US tariffs,of the three only copper producer Antofagasta is likely to remain unscathed by the US decision. Among other mining companies Rio Tinto’s top products are iron ore and bauxite, the raw materials for producing steel and aluminium, while Glencore holds a stake in Russia’s Rusal, the world’s biggest producer of aluminium.
Dixons bounces after 20% drop earlier in the week
Of the FTSE 250 stocks Dixons Carphone draw in the highest volume of trade Friday rising 4.78% to 193.97. The recovery is a small claw-back following the 20% drop earlier this week when the company issued a profit warning and announced plans to close 92 of its 650 UK shops. At the time the company said that its international business was in good shape and that only its UK operations needed a more radical change.