A weak close for global equity markets

Friday, January 24, 2014

European equity markets plunged on Friday, ending the week on a negative note. Fairly disappointing economic data from the US and China recently weighed on market sentiment and prompted investors to a heavy sell-off to lock in some profits following the recent rally in the equity markets.

CAC, DAX, IBEX plunged between 2.5% and 3.64%, while the London benchmark index retreated more than 100 points, down 1.6%, on the day, hitting its lowest level in 2014 so far.

In London, industrial and mining stocks dragged the index lower as base metals prices retreated. It seems that concerns over the Chinese economy weighed heavily again which kept industrial commodities lower. Mondi, Anglo American, Johnson Matthey, Rio Tinto and Glencore plunged between 2.02% and 4.4%.

Banks and insurance companies also posted heavy losses as risk appetite remained limited. Prudential and Aviva declined sharply by 3.66% and 3.04%, respectively, while Standard Chartered, Barclays, Lloyds and HSBC fell more than 2%.

The winners once again were precious metals as “safe haven” buying supported prices, driving gold up to $1265 area and helping silver to hold above the $20 level. Randgold and Fresnillo rebounded strongly adding 1.07% and 1.54%, respectively.

In currency movements, the US dollar index continued to trade sideways around the 80.5 area, failing to provide some well-needed support.

 

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