FTSE Falls on EU Economic Worries and Oil Price War

Worries about the eurozone economy re-emerged as the European Commission cut its growth forecasts, sending markets lower again.

The commission now expects growth of just 0.8% this year, down from 1.2%, and 1.1% in 2015, compared to 1.7% previously, following weakness in Italy, France and Germany.

Meanwhile the US trade deficit widened following a fall in exports to a five month low, again partly a consequence of the problems in the eurozone.

So despite Japanese shares hitting a seven year high in a belated reaction to last week’s stimulus measures from the country’s central bank, the FTSE 100 finished 34 points lower at 6453.97. All eyes now will be on this week’s meetings at the Bank of England and European Central Bank, as well as Friday’s US non-farm payroll numbers.

A number of companies bucked the downward trend after their latest updates.

AstraZeneca rose 51p to 4571.5p after it unveiled three deals to strengthen its cancer treatment business. It agreed to buy Definiens, whose technology was developed by Nobel prize winner Professor Gerd Binning to unlock information from cancer tissue samples, for $150m. It also agreed collaborations with US businesses Pharmacyclics and Johnson & Johnson to combine their drugs with its Imbruvica treatment against cancer.

Primark owner Associated British Foods added 112p to £27.83 while Imperial Tobacco was 110p better at £27.77 and Legal & General climbed 4.6p to 235.2p.

Rolls-Royce rose 13p to 848p as it unveiled a restructuring including 2,600 job cuts and the sudden departure of its finance director.

But oil shares came under pressure as the crude price continued to slide, with Saudi Arabia announcing price cuts to the US. Royal Dutch Shell B shares slipped 62p to £22.20, BP fell 13.3p to 430.4p and Tullow Oil dropped 25.4p to 457.9p.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza