LONDON (Alliance News) - The FTSE 100 is trading lower mid-morning Friday, weighed upon by the mining sector, which has been dragged down by weak commodity prices as investors look ahead to the highly anticipated US nonfarm payrolls report.
The FTSE 100, which is heavily weighted in mining and resource stocks, is down 0.2% at 6,948.79, while the FTSE 250 is up 0.2% at 17,347.35, and the AIM All-Share is up 0.3% at 716.31.
In Europe, the French CAC 40 is down 0.2%, and the German DAX 30 is flat.
Fresnillo, down 2.5%, and Randgold Resources, down 1.9%, are the two biggest fallers in the FTSE 100 as gold prices continue to decline. The precious metal has fallen for the last four days and continues its negative trend, trading at USD1,194.53 an ounce.
Anglo American, down 1.5%, and Rio Tinto, down 0.7%, also are amongst the biggest fallers in the index after an Australian media report that iron ore prices fell to a fresh six-year low of USD59.30 a tonne. Rio also said Friday that it has increased its reserves in the Diavik diamond project, the Pilbara iron project and the Hail Creek Coal project.
Outside of mining, AstraZeneca, down 1.2%, also is one of the biggest fallers in the blue-chip index. The pharmaceutical giant guided that it expects its total revenue to decline by a mid-single digit percentage at constant exchange rates in 2015, in line with previous sales revenue guidance it gave at the time of its full-year results, as it announced changes to the way it presents its revenue. AstraZeneca maintained its core earnings per share guidance.
Shares in Weir Group lead FTSE 100 gainers, up 5.6% on press reports that the oil and gas service company could have attracted a bid from a US private equity firm. The Independent reports that GE Capital is linked with making a 2,800.00 pence per share bid, though it does attribute this to "starry-eyed punters". The stock is quoted at 1,830.36p.
Thomas Cook is the biggest gainer in the FTSE 250, up 19%. The travel operator said it has struck a strategic deal with Chinese investment group Fosun International Ltd under which the latter will acquire a 5% stake in the company. Thomas Cook said Fosun will pay GBP91.8 million to acquire 73.1 million shares Thomas Cook will issue to it, giving Fosun a 5% stake in the company. The shares are valued at 125.58 pence, compared to the travel firm's closing price Thursday of 120.60p. The stock currently trades at 143.90p.
Afren is the second-best performer in the index up 12%. The troubled oil and gas company, which will be relegated from the FTSE 250 on March 23, is looking to China to bring in "substantial" new capital, in the form of new equity, the Financial Times reported. Ethelbert Cooper, the Liberian entrepreneur who founded Afren, plans to recapitalize the company in partnership with a consortium of Chinese investors. This will become the first Africa-China partnership in the oil and gas sector listed in the UK.
Fourth quarter eurozone GDP met expectations to show quarter-on-quarter growth of 0.9%. The figure was a slight improvement on the third quarter reading of 0.8%. The year-on-year figure also matched estimates of a 0.3% growth, marginally higher than the 0.2% shown in the third quarter.
The euro had already fallen to a new 11-year low against the dollar ahead of the GDP results and continued lower afterward. The currency has reached a low Friday of USD1.0961.
The median expectations for UK inflation for the coming year was 1.9% in February compared to 2.5% in November, according to a survey from the Bank of England. This was its lowest level in more than 13 years. UK inflation had fallen to a record low 0.3% in January, dragged by falling motor fuel and food prices.
Still ahead in the economic calendar are the crucial US nonfarm payrolls, unemployment rate and average earnings figures, due at 1330 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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Astrazeneca (AZN)
Anglo American (AAL)
Rio Tinto (RIO)
Weir Group (WEIR)
Fresnillo (FRES)
