FTSE flat as miners weigh on Chinese stockpiling
City Index March 12, 2012 3:00 PM
<p>The FTSE 100 and broader European indices traded flat on Monday as small weakness in mining stocks curtailed gains in insurers and retail stocks on […]</p>
The FTSE 100 and broader European indices traded flat on Monday as small weakness in mining stocks curtailed gains in insurers and retail stocks on concerns that Chinese firms were stockpiling Copper after the latest release of import data out of the region.
By mid-morning trade, the FTSE 100 had lost 1 point, whilst the German and French stock indices gained between 0.1% and 0.4%.
It’s been a fairly uneventful start to the new trading week, with investors trying to digest the upsurge in the US labour market ahead of the FOMC meeting tomorrow night and what a stronger than expected US economic recovery could mean for the prospects of a third phase of quantitative easing by Ben Bernanke, the Fed Chairman.
Copper import data out of China is also playing a role in suppressing stock demand this morning too, with imports of Copper into the world’s fastest growing economy rising 17.1% to 484,569 last month compared to January whilst the country also increased its import of unwrought aluminium by 34% to 124,584. Whilst a rise in imports of metals is normally seen as healthy for global growth, when brought into the context of expected slowing growth in China; the rises have escalated concerns that Chinese firms are stockpiling metals.
Vedanta Resources was the biggest faller in trading as a result, with its shares falling 1.8%, closely followed by Royal Bank of Scotland (RBS) and Rolls Royce shares.
Game Over for Game Group?
Shares in Game Group fell 66% on Monday to trade just above the 1p mark after the struggling game retailer warned shareholders that their shares could now be worthless. The firm has struggled to secure vital new game releases from suppliers over the past month despite agreeing revised lending capacity with its banks, including that of RBS, last month. This has taken its toll on the firm’s ability to attract footfall with the looming cloud of quarterly rental fees for its 1,200 stores due soon.
The words from the firm’s board to shareholders that it is “uncertain whether any of the solutions currently being explored by the board will be successful or will result in any value being attributed to the shares of the company” echoes the ultimate fear that the end is nigh.
Whilst it is sad to see another UK retailer succumb to the economic downturn, it is perhaps nothing of a surprise should the administrators be called in given that its share price has fallen from 300p since May 2008.
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