Resources, Retail and the Peso

Thursday 7 January 2016 

London’s headline indices dived lower on opening after torrid sessions on Wall St and in Asia overnight. Mining and oil equities bore the brunt as investors headed for safe-haven gold.

“The FTSE 100 is down more than 2%, taking it to within striking distance of three-year lows,” said Russ Mould, Investment Director at AJ Bell, noting a cruel confluence of factors influencing the pricing of resources.

“Tensions between Saudi Arabia and Iran continued and, along with a long-standing supply glut of crude oil, helped pushed prices of the black liquid below USD33/bbl.  Concerns about the economic health of metals-hungry China were another factor, as was a second halt to equities trade there within the week after yet another 7% fall.”

“Marks and Spencer (LSE:MKS) was the single bright spot in an otherwise very bleak start to trading, reporting flat Q3 group sales but strong gross margin figures. CEO Marc Bolland is to step down this year and will be replaced by Steve Rowe, the company’s executive director of general merchandise.

“Mobile Streams (LSE:MOS) suffered as it outlined the effect Argentina’s devalued peso would have on its books. Traders will no doubt be looking more closely at other companies with a footprint in Argentina to assess the impact of the lower peso." 

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