FTSE in cautious mode
The FTSE is tentatively lower thanks to the stronger pound but banks and mining stocks are putting in a good performance. There might be more volatility in store for sterling today, the last day of the Conservative Party conference. Indices across Europe are also trading lower, still somewhat perturbed by Italy’s budget plans although the country made a reconciliatory step towards the EU yesterday.
Up, up and away
Somebody in the market is having a field day with Brent Crude prices and no voice of reason will stop that, at least not until November, the due date for Iranian sanctions. Brent crude has notched up every single day this week and is now trading comfortably above $86, a level that seemed far-fetched only a few weeks ago, leaving behind the WTI contract. The case for higher WTI prices has been beaten down by rising US inventories showing there was no build-up of supply shortage. The gap between Brent and WTI has flared up to around $10 compared to only about $7 a month ago. In contrast, in London the slightly panicked oil buying is speeding up as the deadline for Iranian sanctions draws nearer and even evidence that Russia and Saudi Arabia have privately agreed to raise crude output was not enough to really halt the rally in a sustained fashion.
Unilever resistance builds up
The resistance against Unilever’s decision to move its headquarters to Netherlands is gaining ground as another institutional investor joins the ranks of the dissenters. The company may have difficulty getting the decision approved on 25 October because it requires consent from 75% of UK shareholders and 50% of Dutch shareholders. The investment firms opposing the move still don’t hold a stake large enough to be able to outright vote against the move, but they are gathering a following among other UK shareholders who don’t want to see the value of their stock decline. For the time being the company’s shares still continue to slide.
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