Global Markets
A combination of weak Chinese economic data and lower commodity prices is weighing on global stocks for a second day. China’s exports fell by a bigger-than-forecast 6.8 percent in November in dollar terms. Imports declined for a record 13th month, sinking 8.7 percent. China’s yuan weakened to the lowest in four years after the central bank cut the currency’s fixing.
The MSCI Emerging Markets Index is on track for its lowest close since Oct.1. The gauge has sunk 16 percent in 2015, its worst year since 2011, and is close to being oversold. The so-called relative strength index has dropped to 33, the lowest in three months. A level of 30 or lower signals to some traders that selling is overdone.
British Mining Companies
British mining stocks have fallen around 50 percent so far in 2015, due to a slowdown in China, the world’s biggest consumer of metals.
Anglo American has scrapped its dividend for the first time in six years to counter a collapse in commodities. The shares dropped to a record low. The payouts for the second half of 2015 and for 2016 have been suspended, and from now the dividend will rise and fall with the company’s profits. Anglo is battling metals prices that have slumped to the lowest levels in at least six years. Other measures it’s already taken include shedding jobs and selling assets. That hasn’t stopped the shares sinking 70 percent in 2015, the worst year on record.
The FTSE 100 hit a record high of 7,122.74 points in April but has since lost ground, due to concerns over China and the impact of a possible U.S interest rate rise in December. The index is currently down more than 6 percent so far in 2015.
Source: (Bloomberg, Reuters)
