A picture taken on October 5, 2012 shows striking mine workers gathering outside the Anglo American Platinum (Amplats) mine in Rustenburg. Mining giant Anglo American struck a new all-time low at 277.6 pence yesterday, but later recovered ground to close off by 1.2% at 319.7 a day after the firm announced an “accelerated and more radical restructuring programme” designed “to transform the company’s competitive position.
AFP
London
European stocks lost ground yesterday with miner Anglo American, at the centre of a global “commodity storm”, striking new historic lows before an afternoon fightback, dealers said.
Markets had opened with slender gains after the previous day’s heavy commodity-fuelled losses, but stumbled once more as investors eyed a fresh collapse in Anglo’s shares.
A modest recovery in oil prices — with Brent crude bobbing back above $40 per barrel — was shrugged off by markets, which also remain anxious over China’s ongoing economic woes.
“This morning’s tentative gains look like they were a mere stop-gap, the brief calm before the resumption of the commodity storm,” said Spreadex analyst Connor Campbell.
“With little to distract investors, it’s hard not to linger on the whopping 85,000 jobs Anglo is set to slash—and, of course, that suspended dividend.”
Anglo American struck a new all-time low at 277.6 pence, but later recovered ground to close off by 1.2% at 319.7 a day after the firm announced an “accelerated and more radical restructuring programme” designed “to transform the Company’s competitive position.
Anglo had revealed plans on Tuesday to slash its workforce from 135,000 staff to 50,000 after 2017, adding that it would suspend dividend payments until the end of next year in response to collapsing commodity demand and prices.
Noting the recovery of miners, James Hughes of GKFX identified a “relative calm ahead of the next week’s key Fed interest rate decision.”
At the close in London, the FTSE 100 index was 0.14% down after earlier small gains while Frankfurt fell 0.6% despite Volkswagen’s strong 6.2% rally on a report that allegations it lied over carbon dioxide emissions were unfounded.
Paris shed 0.9% in value.
This week’s Anglo news has prompted heightened worries about the outlook for mining and metals companies across the world, dealers said.
“Equities (are) on another downer as the commodity sector remains under considerable pressure, the Anglo American dividend cut rippling through and generating uncertainty about income sustainability elsewhere,” said Mike van Dulken, head of research at traders Accendo Markets.
Steelmakers lost ground early in the session but fought back. ArcelorMittal shed 2.4% before ending up 3.5% in Paris, and ThyssenKrupp ended up 0.1% after first losing 0.9% in Frankfurt.
In Asia meanwhile, China’s ongoing economic woes cast a pall over the region’s trading floors after a downturn on Wall Street, but rising oil prices gave some respite for energy firms.
However, the oil market is still struggling around seven-year lows and analysts said the gloom was likely to last for some time.
“We believe that the current crude oversupply in the global market will persist over the coming years, reinforcing our flat outlook for oil prices over 2015-2017,” BMI Research said in a market commentary.
US stocks dipped in early trading yesterday with the Dow Jones Industrial Average off 0.22%, before edging up to be almost unchanged mid-session while the broad-based S&P 500 and the tech-rich Nasdaq Composite Index each lost 1%.
In foreign exchange activity, the euro climbed against the dollar.
