The FTSE remained up this afternoon, reaching 4549.55 by 3pm despite failing to hold on to all of this morning’s gains. Meanwhile, on Wall Street, commodities prices tumbled and negative manufacturing figures weighed on hopes of a recovery.
The FTSE’s slight slip backwards was reflected by some of the index’s winners and losers. Schroders’ share price may have lost 1.15% since this morning, but was still top of the leaderboard, with its share price up by 4.21% at 817p. Aviva fared better, adding to this morning’s gains to achieve a rise of 3.46% and a share price of 343.5p. Other afternoon winners included RSA Insurance Group with a 3.89% rise to 128.20p, and Eurasian Natural Resources which rose 3.43% at 830p.

On Wall Street, the markets opened down for the second day, as oil and other raw material producers saw their share prices tumble. Gains were seen in the finance and retail industry, with Bank of America gaining 1.50% to $13.54, American Express rising 1.19% to $28.01, and Wal-Mart adding 0.87% to $49.35. Coca-Cola was also up 0.85% at $49.81.

The morning’s biggest losses were concentrated on mining firms, with Caterpillar losing 3.03% at $41.60, Alcoa dropping 2.93% to $10.93, DuPont E I De Nemours falling 1.93% at $29.52 and Chevron losing 1.82% at $67.10. This decline has been attributed to a fall in Chinese share prices, which was based on an expectation of government spending cuts. Liam Dalton, chief executive officer of Axiom Capital Management said: ‘China has been the epicentre for marginal growth in the global economy, so weakness there would take the edge off sentiment around the world.’ [1]

Also today, US durable goods orders slumped by 2.5% – 1.9% more than the predicted decline of 0.6%. This has sparked further worries about an economic recovery. [2] However, on orders excluding the embattled automobile industry, figures defied expectations to increase by 1.1% – their highest level in four months. Dean Maki, chief US economist at Barclays Capital in New York, called this: ‘an important reason why we expect the overall economy will begin to grow.’ [3]

Source: [1] Bloomberg News (29 July 2009)
Source: [2] Reuters News (29 July 2009)
Source: [3] Bloomberg News (29 July 2009)

By Anthony Grech, Research Analyst, IG Index.

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