Tullow Oil leads 100 in London
European equities markets were significantly lower Friday on an increased possibility that Greece could default on its debt as soon as this weekend, raising the concern level over the European region’s debt problems and ratcheting up worries that the economic recovery is faltering.
Additionally, markets reacted to the resignation of European Central Bank board member Juergen Stark over his opposition to bond purchases by the Bank.
The FTSE 100 was down 2.35 percent to 5,214.65 in London, while the FTSE 250 dropped 2.06 percent to 10,151.4.
While the energy sector was mostly lower, it also provided the biggest gainers on both the 100 and the 250 as Tullow Oil (LSE: TLW) added 15.16 percent on the news that it has discovered new oil resources off the coast of French Guiana, while Exillon Energy (LSE: EXI) was up 11.2 percent to lead gains on the 250.
Barclays (LSE: BARC) led declines in the London banking sector and on the 100 as it dropped 9.43 percent, while Lloyds Banking Group (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) each dropped more than 5 percent as banks were hurt by higher interbank borrowing costs.
The retail sector was also mostly lower as Home Retail Group (LSE: HOME) dropped 9.34 percent as the DIY retailer led declines on the 250, followed by automobile retailer Inchcape (LSE: INCH), which was down 6.71 percent, while there were only two gainers in the retail sector, led by online grocery retailer Ocado Group (LSE: OCDO), which added 4.7 percent.
The mining sector saw only two gainers, as gold miners Randgold Resources (LSE: RRS) and Fresnillo (LSE: FRES) added 0.43 percent and 0.14 percent respectively but were still among the top five gainers on the 100, while Vedanta Resources (LSE: VED) was the worst performer in the sector as it dropped 6.13 percent, followed by a 5.9 percent decline for Xstrata (LSE: XTA) as both were among the biggest decliners on the 100.
Airlines led a mostly lower travel and leisure sector lower, as International Consolidated Airlines Group (LSE: IAG) was down 6.29 percent and easyJet (LSE: EZJ) dropped 5.88 percent.
The FTSE Eurofirst 300 was down 2.5 percent to 916.1 while the CAC-40 was down 3.6 percent to 2,974.59, the Dax was 4.04 percent lower to 5,189.93 and the IBEX dropped 4.44 percent to 7,910.2, with just one gain on the Dax and no gainers on the CAC-40 or the IBEX.
Most markets in Asia and the Pacific region were lower, with declines coming after China released new data showing that inflation there is still above 6 percent and that industrial production did not grow as much in August as it did in July.
China’s National Bureau of Statistics said inflation was at 6.2 percent in August after being at 6.5 percent in July, while industrial production was up 13.5 percent in August but was down from a 14 percent gain in July.
Tokyo’s markets were lower as the Nikkei 225 dropped 0.63 percent to 8,737.66, while the Topix index was down 0.23 percent to 755.7 and the Mothers market was 0.45 percent lower to 427.42.
Machinery-related shares were still down after a report that machine tool orders in Japan were down 12.7 percent from July, with construction equipment manufacturer Komatsu (TYO 6301) was 4.5 percent lower and industrial robot maker Fanuc (TYO: 6954) was 7.6 percent lower.
The Shanghai Composite was down 0.05 percent lower to 2,497.75, Hong Kong’s Hang Seng fell 0.23 percent to 19,866.6, the Straits Times Index was down 1.11 percent to 2,825.1 in Singapore, India’s Sensex dropped 1.74 percent to 16,867, and the Kospi was 1.83 percent lower to 1,812.93 in South Korea.
Australia’s markets saw gains as the S&P/ASX200 was up 0.16 percent to 4,194.7 and the Sydney Ordinaries gained 0.18 percent to 4,277.4, while the Taiex was 0.82 percent higher to 7,610.57 in Taiwan.
New York equities markets were lower on concerns about debt problems in Europe, with the Dow Jones Industrial Average down 2.96 percent to 10,961.7 in midday trade, while at the same time the S&P 500 had dropped 2.87 percent to 1,151.84 and the Nasdaq Composite was 2.58 percent lower to 2,463.89.
Crude oil prices were lower on the stronger US dollar and on declines in US equities markets, and as projections showed that a hurricane brewing in the Gulf of Mexico was likely to miss key oil-producing areas, with October contracts for West Texas Intermediate crude down $2.83 to $86.22 per barrel at just before 12:30 p.m. on the New York Mercantile Exchange, while recent reports showed Brent crude down $2.62 to $111.93 per barrel on the ICE Futures Europe exchange in London.
Gold was higher in New York trade as equities markets declined, but gains were limited by the strength of the dollar, with December contracts up $11.50 to $1,869 per troy ounce in midday trade, but silver was 25 cents lower to $42.29 per troy ounce.
Copper prices also slipped, with December contracts down 15 cents to $4 per pound at midday in New York, while three-month contracts dropped $294 to $8,821 per tonne on the London Metal Exchange.
Other base metals prices were also lower in London.