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FTSE winning streak threatened amid QE doubts
by Chris Marshall on Oct 31, 2013 at 10:19
Uncertainty about the fate of US stimulus and some disappointing corporate financial updates from UK heavyweights including Royal Dutch Shell dragged markets lower on Thursday morning.
The US Federal Reserve once again wrong-footed market watchers, with a more ‘dovish’ statement than expected yesterday when it concluded its policy-setting meeting. Hopes that economic weakness meant the central bank would maintain the scale of its bond buying scheme possibly until the end of March were dashed by the statement.
However, as expected, the Fed's FOMC committee did vote to maintain the $85 billion monthly bond buying scheme for now.
The FTSE 100 fell 0.4% to 6,747, a bigger decline than on other European markets as some blue chip financial updates took their toll.
Specialty chemicals maker Croda (CRDA.L) reported an 0.8% underlying sales rise in the third quarter, while telling shareholders to expect more of the same in the fourth quarter. Shares slumped 8% to £24.29.
Shell (RDSb.L) appeared to lose a point in its rivalry against BP (BP.L). Royal Dutch shares fell 4.7% to £21.67 after the oil giant reported a decline in third quarter earnings to $4.2 billion in third quarter, from $6.2 billion previously. Earlier this week BP had also reported a profit decline, but a surprise dividend hike had garnered investor favour.
AstraZeneca (AZN.L) was trading 1.5% lower at £32.79 after reporting a 6% decline in third quarter sales to $6.25 billion and 28% drop in earnings per share. The drugs company promoted Marc Dunoyer to be its new chief financial officer.
Mining stocks also fell as Antofagasta (ANTO.L) reported a fall in both copper and gold production in the third quarter. The Chilean miner said it was still on track to meet its 2013 targets, but still fell 2.6% to 992p, followed lower by stocks including Fresnillo (FRES.L) and Randgold (RRS.L).
Although these weighed on the index the FTSE 100 has shown remarkable resilience in recent weeks. On several times occasions the index has fallen initially to close slightly higher, enabling it to maintain an almost uninterrupted winnng streak for three weeks.
Of mid cap movers, data group TeleCity (TCY.L) dropped sharply, down 9.2% to 717p, after announcing that finance director Brian McArthur-Muscroft was to step down.
The pound lost ground against the dollar, despite another upbeat report on the UK economy. This time, it was Nationwide showing that UK house prices rose by 1% in October. The report though adds to fears of a bubble.
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- Royal Dutch Shell PLC (RDSb.L)
- Croda International PLC (CRDA.L)
- BP PLC (BP.L)
- Antofagasta PLC (ANTO.L)
- Fresnillo PLC (FRES.L)
- Randgold Resources Ltd (RRS.L)
- Telecity Group PLC (TCY.L)
- AstraZeneca PLC (AZN.L)