Market overview: African Barrick and Randgold grind higher


LONDON (ShareCast) - 1557: Randgold Resources (Dusseldorf: RGR1.DU - news) and African Barrick Gold (LSE: ABG.L - news) are moving up their respective leaderboards on the FTSE 100 and FTSE 250 as gold futures continue to grind higher, perhaps due to the uncertainty in markets. The VIX Volatility index is up 10 percentage points at the moment to 17.39, but is not too high by any standards, even gold's.

1545: If today's FT is anything to go by there is a fair bit of market commentary out there regarding the role which uncertainty about China - and its shadow banking system more specifically - might be playing in recent market volatility. To take into account, one columnist highlights some of the financial channels which exist and how tightening credit conditions in the country might seep out.

1532: Markets are now solidly lower after a weak start on Wall Street as investors adopt a cautious approach ahead of the Fed decision later on. A 0.2 per cent decline in US mortgage applications and a mixed batch of earnings from heavyweights Boeing (NYSE: BA - news) , Yahoo (TLO: YA-U.TI - news) ! and Dow Chemical (Berlin: DCH1.BE - news) were also weighing on sentiment Stateside. In London, Sainsbury (Berlin: SUY1.BE - news) has picked off its intraday low after S&P Capital upgraded the stock from 'sell' to 'hold', saying that the CEO succession gives 'more clarity'. The FTSE 100 is down 59.72 at 6,512.61.

1427: Dollar/yen is now down by a fair amount, 0.72 per cent lower at 102.2, as risk aversion edged higher. It might have been too much to expect significant gains in risk assets ahead of the US FOMC decision, but markets are clearly still somewhat nervous, not least because of the ongoing situation in emerging markets - China included. Of interest however, some commentators, such as James Mackintosh at the FT, today highlight how a real 'correction' in markets is necessary so as to avoid a build-up of excessive risk taking in markets.

1352: The recovery has some way to run before it would be appropriate to consider moving away from the emergency setting of monetary policy, Governor Carney said this afternoon in a speech delivered in Edinburgh.

1322: South Africa's central bank has unexpectedly raised its main policy rate by 50 basis points to 5.5 per cent.

1246: Ratings agency Fitch has lowered its outlook for companies in the UK's water sector to negative from stable following guidance related to risks and rewards published by the regulator Ofwat for the price review 2014, which covered covering the fiscal years running from 2015 to 2020. FTSE 100 down 2 at 6,572.

1245: Economists at JP Morgan (Other OTC: JPYYL - news) have reportedly lowered their forecast for Turkish GDP growth in 2014 to 1.9 per cent from 2.5 per cent beforehand.

1147: Alberto Gallo at RBS (LSE: RBS.L - news) believes that the move by Turkey's central bank overnight will likely cause a relief rally in global risk assets and emerging-market ones in particular. However, he also writes to clients saying that: "While the rate hike has helped stem lira weakness in the short term, it increases the chances of slower growth and a domestic credit crunch in the medium term."

1108: Barclays (LSE: BARC.L - news) is said to be considering the closure of a quarter of its high street branches in coming years along with 40,000 job cuts. Chief Executive Antony Jenkins is believed to be eyeing 400 branch closures in the next five years or so as the increasing use of technology replaces jobs. It is understood Barclays will remove managing directors from the investment bank, already the target of more than 1,600 reductions a year ago, when it publishes its results next month. Shares rose 2.45% to 280p at 11:08.

1036: The changes announced last night by Turkey's central bank to its interest rate corridor means that the "true extent of monetary tightening announced at last night's emergency MPC (KOSDAQ: 050540.KQ - news) meeting is a little less than the aggressive hike in the benchmark one-week repo rate would otherwise suggest," Capital Economics says. Nonetheless, they go on to add that: "Vulnerabilities remain, but last night's move should bring some stability to Turkey's financial markets over the coming weeks."

1027: Italian auto manufacturer Fiat (Berlin: FIAT.BE - news) has reported a quarterly profit of 931m euros, below analysts's forecasts. Acting as a backdrop, the Turkish lira has given up some of its earlier gains. FTSE 100 up 43 to 6,616.

0936: Antofagasta (Other OTC: ANFGF - news) continues to lead the pack after beating analysts' estimates on production guidance and cash costs. Sainsbury's has slipped to the bottom of the pile after announcing that its Chief Executive Officer is to leave.

0819: Stocks have started the day moving noticeably higher, led by gains in shares of Antofagasta and Anglo American (LSE: AAL.L - news) on the back of their latest quarterly production updates. As regards the former, analysts at Westhouse Securities are labelling it as a strong report. Acting as a backdrop, investors were cheered by the Turkish central bank's decision, overnight, to hike rates by more than was expected. UK house prices rose by 0.7 per cent month-on-month in January, according to Nationwide (LSE: CCDS.L - news) . FTSE 100 up 58 to 6,630.

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