UK shares flatlined on Tuesday with the Big Board ending four points lower at 7,521.11. Miners gained however with Fresnillo and Randgold Resources up 3.33% and 2.73%. Burberry shares however tumbled almost 4% to 1,738.50p after HSBC slashed its rating on the stock to Reduce.
The pound slipped -0.05% to 1.2893.UK Election jitters are clearly at work: a recent YouGov poll predicted a hung parliament though a comfortable Conservative win appears still the most likely outcome. Meanwhile the US dollar continues to weaken.
A mix of eurozone retail data emerged earlier with April sales seeing a 2.5% boost across the region. However that didn’t prevent the German Dax tumbling more than 1% earlier to 12,686 points.
- UK FTSE 100 7,521.11 -0.29%
- Dow 21,153.62 -0.14%
- S&P 500 2,431.33 -0.19%
- Nasdaq 6,289.67 -0.09%
- DAX 12,691.76 -1.02%
- CAC 40 5,272.08 -0.67%
- Nikkei 225 19,979.90 -0.95%
- Gold 1,298.00 +1.19%
- Oil WTI 47.22 -0.38%
Gold heads higher
A bunch of uncertainties – the UK election, anxiety about Qatar-related tensions, plus former FBI director James Comey’s Thursday testimony in front of the Senate Intelligence Committee – have all helped shove gold, up 1.22% to $1,294.97, higher.
The yellow metal hit six-week highs earlier as global stocks wobbled – the German Dax was down more than 1% while French shares were also sharply lower, not helped by a strengthened euro.
Gold has also pivoted on poorer US jobs data – the US Labor Department confirmed on Friday 138,000 jobs were added to the economy in May, substantially below the 180,000 figure anticipated.
RBS settles with shareholders
Unhappy shareholders have finally reached a deal with RBS worth £200m. The RBS Shareholders Action Group had claimed they were misled into giving £12bn to the bank in 2008 as part of a disastrous rights issue.
The action group has now accepted an 82p per share offer, double the original 41.2p per share offered at the end of 2016. The move means ex RBS boss Fred Goodwin swerves a high court witness box appearance to answer questions about his role in the events leading to the public bailout and RBS’ near collapse.
RBS remains 70% owned by the taxpayer in contrast to Lloyds whose shares are now completely off the taxpayer’s hands.
Brexit uncertainty deters investors
Office of National Statistics data on overseas investment in UK companies emerged earlier and the data is not, at first glance, encouraging.
While overseas operators took an interest in more than 40 mergers or buy-outs in the first quarter of 2017, the value of the mergers was just £5.1bn. This compares to more than £50bn this time last year.
“The total value of successful domestic and cross-border M&A in Quarter 1 2017 was,” says the ONS, “notably lower than the values recorded in 2016.”
But it went on, “the value of inward M&A activity recorded in 2016 was unusually high and dominated by a small handful of very-high-value transactions.” Still, many companies will still have a wait-and-see strategy while a Brexit deal emerges.
Breaking news: The US dollar slumps to its lowest level since President Trump took office.