The FTSE 100 is trading lower this morning and in doing so has touched its lowest level of the week after yesterday saw an inside day for the index. The reason behind the sell-off could be a spillover from the declines seen in continental stock markets that began shortly after ECB President Mario Draghi’s speech in Brussels, or simply a case of some profit-taking following recent gains for the benchmark.
Miners lead the losers
With the blue-chip index lower by approximately 50 points at the time of writing it should come as no surprise that the majority of companies listed in the FTSE 100 are in negative territory on the day. Anglo American, Antofagasta and BHP Billiton are all significantly lower this morning with the all three falling back after trading close to their highest levels in over a month yesterday. Shares in supermarket Sainsbury’s are one of the few bright spots, potentially gaining on the latest trading update from Home Retail Group whom it agreed to purchase earlier this year. Whilst the acquisition of Argos-owner Home Retail Group is still awaiting approval from the Competition and Markets Authority, both parties remain hopeful that the regulatory body won’t scupper the deal and the announcement this morning of a 2.6% rise in total sales for the target company has also provided a boost to the acquirer’s stock price.
No cut from RBNZ
One of the biggest macroeconomic developments overnight was the decision from the Reserve Bank of New Zealand to stand pat on their current monetary policy mix which saw their currency surge higher. Whilst a further reduction in their overnight interest rate wasn’t widely expected, the subsequent reaction reveals a fair amount of market participants believed a cut could occur and the possibility of such was discounted in the New Zealand dollar prior to the announcement. The GBPNZD has dropped on the back of it to the lowest level in over a year and this morning broke down below the 2.03 handle.