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Anglo shares hit record low; VW lowers CO2 emissions impact - as it happened Anglo shares hit record low; VW lowers CO2 emissions impact - as it happened
(7 months later)
5.55pm GMT5.55pm GMT
17:5517:55
European shares slide againEuropean shares slide again
There was no repeat of Tuesday’s commodity driven market rout, but it was still a volatile day. With iron ore and oil prices still weak, shares were under pressure initially. But a biggest than expected fall in US crude stocks sent crude sharply higher, at least for a while, and gave some support to stock markets. After further consideration of the figures, however, investors decided they did not like the news of a weekly increase in distillate fuels, and crude slipped back once more, taking the markets with it.There was no repeat of Tuesday’s commodity driven market rout, but it was still a volatile day. With iron ore and oil prices still weak, shares were under pressure initially. But a biggest than expected fall in US crude stocks sent crude sharply higher, at least for a while, and gave some support to stock markets. After further consideration of the figures, however, investors decided they did not like the news of a weekly increase in distillate fuels, and crude slipped back once more, taking the markets with it.
Anglo American slumped another 14% initially to a new low of 2277p before recovering to close just 1.2% lower while Fresnillo, down 8% at one point after news of a ruptured pipeline at its Saucito mine, ended down just 6p or 0.9%. Overall the scores showed:Anglo American slumped another 14% initially to a new low of 2277p before recovering to close just 1.2% lower while Fresnillo, down 8% at one point after news of a ruptured pipeline at its Saucito mine, ended down just 6p or 0.9%. Overall the scores showed:
On Wall Street, the Dow Jones Industrial Average is currently 111 points or 0.6% lower. Meanwhile Brent crude is down 1.5% at $39.62.On Wall Street, the Dow Jones Industrial Average is currently 111 points or 0.6% lower. Meanwhile Brent crude is down 1.5% at $39.62.
On that note, it’s time to close for the evening. Thanks for all your comments and we’ll be back tomorrow.On that note, it’s time to close for the evening. Thanks for all your comments and we’ll be back tomorrow.
4.36pm GMT4.36pm GMT
16:3616:36
Crude prices have come off their best levels on further consideration of the US inventory figures. Yes, commercial crude stocks fell by a higher than expected 3.6m barrels last week, pointing to stronger demand.Crude prices have come off their best levels on further consideration of the US inventory figures. Yes, commercial crude stocks fell by a higher than expected 3.6m barrels last week, pointing to stronger demand.
But stocks of distillate - diesel fuels and fuel oils - rose from 144.4m barrels to 149.4m.But stocks of distillate - diesel fuels and fuel oils - rose from 144.4m barrels to 149.4m.
#Crude has turned lower again after the 3.6m barrel draw in inventories was offset by the sharp build in distillate stocks (5m barrels) ^FR#Crude has turned lower again after the 3.6m barrel draw in inventories was offset by the sharp build in distillate stocks (5m barrels) ^FR
Brent is now up 0.52% at $40.47, down from its earlier peak of $41.59.Brent is now up 0.52% at $40.47, down from its earlier peak of $41.59.
3.55pm GMT3.55pm GMT
15:5515:55
Commenting on the US crude figures, David Morrison at Spread Co said:Commenting on the US crude figures, David Morrison at Spread Co said:
Crude oil inventories as reported by the Energy Information Exchange slumped by 3.6 million barrels for the week ending 4 December. This was far below the prior reading which showed a build of 1.2 million barrels. The consensus market expectation was for an increase of 700,000.Crude oil inventories as reported by the Energy Information Exchange slumped by 3.6 million barrels for the week ending 4 December. This was far below the prior reading which showed a build of 1.2 million barrels. The consensus market expectation was for an increase of 700,000.
The news led to crude flying higher to the general relief of investors. Persistent weakness in the oil market has weighed on both US and UK stocks. This is due to the major indices heavy weightings of energy stocks and companies who supply services, machinery and infrastructure to the sector.The news led to crude flying higher to the general relief of investors. Persistent weakness in the oil market has weighed on both US and UK stocks. This is due to the major indices heavy weightings of energy stocks and companies who supply services, machinery and infrastructure to the sector.
Both WTI and Brent contracts were firmer ahead of the release. The price of crude oil has fallen around 65% since the summer of 2014. The sell-off coincided with the recovery in the US dollar which rallied on expectations of Fed tightening. At the same time there is a glut of crude coming to market which continues to outstrip demand.Both WTI and Brent contracts were firmer ahead of the release. The price of crude oil has fallen around 65% since the summer of 2014. The sell-off coincided with the recovery in the US dollar which rallied on expectations of Fed tightening. At the same time there is a glut of crude coming to market which continues to outstrip demand.
3.41pm GMT3.41pm GMT
15:4115:41
But despite the drop in US crude stocks, they are still well above last year’s levels:But despite the drop in US crude stocks, they are still well above last year’s levels:
US COMMERCIAL CRUDE STOCKS fell -3.6 million bbl last week but still +105 million bbl above prior-year level pic.twitter.com/LHrU51dI9IUS COMMERCIAL CRUDE STOCKS fell -3.6 million bbl last week but still +105 million bbl above prior-year level pic.twitter.com/LHrU51dI9I
3.39pm GMT3.39pm GMT
15:3915:39
US oil inventories fall, pushing up crude pricesUS oil inventories fall, pushing up crude prices
American oil stocks dropped by more than 3.5m barrels to 485.9m last week, a bigger than expected decline which has helped support the crude price.American oil stocks dropped by more than 3.5m barrels to 485.9m last week, a bigger than expected decline which has helped support the crude price.
EIA: #crude oil inventories fell 3.57 million barrels last week. This is more than expected and higher than API's estimate. #WTI jumps ^FREIA: #crude oil inventories fell 3.57 million barrels last week. This is more than expected and higher than API's estimate. #WTI jumps ^FR
Fears of oversupply and lack of demand have sent oil prices tumbling, with last week’s indecisive Opec meeting adding to the decline. But with US stocks down last week, demand appears to be higher than expected, so Brent crude has reacted by climbing 1.79% to $40.98.Fears of oversupply and lack of demand have sent oil prices tumbling, with last week’s indecisive Opec meeting adding to the decline. But with US stocks down last week, demand appears to be higher than expected, so Brent crude has reacted by climbing 1.79% to $40.98.
UpdatedUpdated
at 3.40pm GMTat 3.40pm GMT
3.18pm GMT3.18pm GMT
15:1815:18
Sports Direct effectively pays workers less than minimum wageSports Direct effectively pays workers less than minimum wage
A Guardian investigation has revealed that Sports Direct, the retail group founded by Newcastle United owner Mike Ashley, has effectively been paying workers below the UK minimum wage.A Guardian investigation has revealed that Sports Direct, the retail group founded by Newcastle United owner Mike Ashley, has effectively been paying workers below the UK minimum wage.
The full story is here:The full story is here:
Related: Revealed: how Sports Direct effectively pays below minimum wage
2.57pm GMT2.57pm GMT
14:5714:57
The European Central Bank says markets had unrealistic expectations about what stimulus measures the bank would unveil at last week’s meeting, said policy maker Ewald Nowotny.The European Central Bank says markets had unrealistic expectations about what stimulus measures the bank would unveil at last week’s meeting, said policy maker Ewald Nowotny.
Disappointment at the ECB announcement saw the euro move sharply higher, but Nowotny said the bank’s communication was not to blame for the misunderstanding, Bloomberg is reporting.Disappointment at the ECB announcement saw the euro move sharply higher, but Nowotny said the bank’s communication was not to blame for the misunderstanding, Bloomberg is reporting.
Not everyone is convinced by this argument.Not everyone is convinced by this argument.
ECB continues to blame mkts for absurd expectations, not themselves for absurd communication https://t.co/DoXZEIRhZt pic.twitter.com/ss6KdwhajOECB continues to blame mkts for absurd expectations, not themselves for absurd communication https://t.co/DoXZEIRhZt pic.twitter.com/ss6KdwhajO
2.44pm GMT2.44pm GMT
14:4414:44
Wall Street edges higherWall Street edges higher
US markets have made an uncertain start, with an initial fall at the opening bell.US markets have made an uncertain start, with an initial fall at the opening bell.
US stocks open lower; oil, dollar eyed https://t.co/qT6a6zPHul pic.twitter.com/5ol17HpYxHUS stocks open lower; oil, dollar eyed https://t.co/qT6a6zPHul pic.twitter.com/5ol17HpYxH
But as trading got properly underway, shares began to move higher. A calmer day in the commodities market has seen Brent crude rise nearly 1% to $40.64 a barrel, while copper has risen on hopes that output cuts would put a floor under falling prices. Iron ore, however, remained under pressure, down another $0.5 to $38.30 a tonne.But as trading got properly underway, shares began to move higher. A calmer day in the commodities market has seen Brent crude rise nearly 1% to $40.64 a barrel, while copper has risen on hopes that output cuts would put a floor under falling prices. Iron ore, however, remained under pressure, down another $0.5 to $38.30 a tonne.
On Wall Street the Dow Jones Industrial Average is currently up around 50 points or 0.3%, helped by reports of merger talks between Dow Chemical and DuPont.On Wall Street the Dow Jones Industrial Average is currently up around 50 points or 0.3%, helped by reports of merger talks between Dow Chemical and DuPont.
The rise has given some support to European markets, with the FTSE 100 now up 15 points while Germany’s Dax and France’s Cac have come off their worst levels.The rise has given some support to European markets, with the FTSE 100 now up 15 points while Germany’s Dax and France’s Cac have come off their worst levels.
UpdatedUpdated
at 4.03pm GMTat 4.03pm GMT
2.03pm GMT2.03pm GMT
14:0314:03
Here’s our full story on Volkswagen, and the news that just 36,000 or so cars have faulty CO2 emissions.Here’s our full story on Volkswagen, and the news that just 36,000 or so cars have faulty CO2 emissions.
Related: VW says CO2 emissions irregularities affect fewer cars than feared
2.00pm GMT2.00pm GMT
14:0014:00
Why Anglo's share price is hitting record lows (again)Why Anglo's share price is hitting record lows (again)
The City usually likes the sound of job cuts and restructuring, but Anglo American’s share price is still deep in the red today (down another 6%).The City usually likes the sound of job cuts and restructuring, but Anglo American’s share price is still deep in the red today (down another 6%).
And that’s because analysts fear that axing the dividend, slashing capital expenditure, and losing 85,000 jobs may not be enough to protect Anglo from the mining slump.And that’s because analysts fear that axing the dividend, slashing capital expenditure, and losing 85,000 jobs may not be enough to protect Anglo from the mining slump.
Des Kilalea, analyst at RBC Capital Markets, says shares are sliding because Anglo may need to raise more cash from shareholders.Des Kilalea, analyst at RBC Capital Markets, says shares are sliding because Anglo may need to raise more cash from shareholders.
RBC has cut its price target for Anglo to £3 - which is pretty much where its trading today (down around 75% this year!)RBC has cut its price target for Anglo to £3 - which is pretty much where its trading today (down around 75% this year!)
And Kilalea warns that there are several risks, which could hit Anglo’s share price. They include:And Kilalea warns that there are several risks, which could hit Anglo’s share price. They include:
And if that wasn’t enough, Kilalea adds:And if that wasn’t enough, Kilalea adds:
In a very competitive environment, Anglo American, as with all mining companies, faces challenges finding and replacing mined reserves.In a very competitive environment, Anglo American, as with all mining companies, faces challenges finding and replacing mined reserves.
1.51pm GMT1.51pm GMT
13:5113:51
The Greek stock market has shed almost 2% today, hitting its lowest level in over three years:The Greek stock market has shed almost 2% today, hitting its lowest level in over three years:
*ATHENS'S STOCK INDEX FALLS TO LOWEST INTRADAY SINCE JUNE 2012*ATHENS'S STOCK INDEX FALLS TO LOWEST INTRADAY SINCE JUNE 2012
1.00pm GMT1.00pm GMT
13:0013:00
Big names continue to pour into ICAP’s offices in the City, and around the world, doing their bit for its charity day (see earlier post for details).Big names continue to pour into ICAP’s offices in the City, and around the world, doing their bit for its charity day (see earlier post for details).
The Duke and Duchess of Cambridge are the star turn in London; they’ve mingled with the traders raising money for a string of good causes.The Duke and Duchess of Cambridge are the star turn in London; they’ve mingled with the traders raising money for a string of good causes.
Kate has tested her skills on ICAP’s trading:Kate has tested her skills on ICAP’s trading:
The revenues raised form trading today will be donated to a range of charities, including SkillForce, of which William is patron, and SportsAid and Place2Be, of which Kate is patron.The revenues raised form trading today will be donated to a range of charities, including SkillForce, of which William is patron, and SportsAid and Place2Be, of which Kate is patron.
Our future king and queen also squeezed in some ping pong – although not terribly well, frankly.Our future king and queen also squeezed in some ping pong – although not terribly well, frankly.
The Duke v The Duchess at Ping Pong @TeamSportsAid #ICAPCharityDay pic.twitter.com/JuQUrAu6BWThe Duke v The Duchess at Ping Pong @TeamSportsAid #ICAPCharityDay pic.twitter.com/JuQUrAu6BW
It looks like quite a day:It looks like quite a day:
Rugby star @LewisMoody7 showing his support for @BrainTumourOrg at #ICAPCharityDay. pic.twitter.com/rcXzl603S6Rugby star @LewisMoody7 showing his support for @BrainTumourOrg at #ICAPCharityDay. pic.twitter.com/rcXzl603S6
Some hands on support with @Borne_CWHC who find ways to prevent premature birth #ICAPCharityDay pic.twitter.com/JJ9SKfz3aASome hands on support with @Borne_CWHC who find ways to prevent premature birth #ICAPCharityDay pic.twitter.com/JJ9SKfz3aA
UpdatedUpdated
at 1.08pm GMTat 1.08pm GMT
12.42pm GMT12.42pm GMT
12:4212:42
RBS fined over Coutts tax evasion caseRBS fined over Coutts tax evasion case
Royal Bank of Scotland has been fined by Swiss authorities over tax evasion allegations involving its wealth manager arm, Coutts.Royal Bank of Scotland has been fined by Swiss authorities over tax evasion allegations involving its wealth manager arm, Coutts.
RBS will pay €23m to Swiss authorities to settle claims that staff at Coutt’s international arm helped clients to dodge tax.RBS will pay €23m to Swiss authorities to settle claims that staff at Coutt’s international arm helped clients to dodge tax.
The case hit the headlines back in February 2015. As we wrote at the time:The case hit the headlines back in February 2015. As we wrote at the time:
German prosecutors are investigating current and former employees of the private bank’s Zurich and Geneva offices.German prosecutors are investigating current and former employees of the private bank’s Zurich and Geneva offices.
The bank looks after £20bn belonging to 32,000 international customers including sovereigns, celebrities and multimillionaire entrepreneurs. Each must show they have at least £1m in free cash to open an account – and even then they may not be allowed in.The bank looks after £20bn belonging to 32,000 international customers including sovereigns, celebrities and multimillionaire entrepreneurs. Each must show they have at least £1m in free cash to open an account – and even then they may not be allowed in.
Related: Coutts' Swiss operation faces tax evasion claims
Coutts is famously the Queen’s bank, although this case didn’t involve staff in London.Coutts is famously the Queen’s bank, although this case didn’t involve staff in London.
RBS sold the international arm of Coutts this spring, but retained liability for this case. It still owns the UK division.RBS sold the international arm of Coutts this spring, but retained liability for this case. It still owns the UK division.
12.02pm GMT12.02pm GMT
12:0212:02
Back in the UK... policymakers at the Bank of England have warned that it is “difficult to predict” how global markets will react to a US interest rate hike.Back in the UK... policymakers at the Bank of England have warned that it is “difficult to predict” how global markets will react to a US interest rate hike.
And that is a worry, given that UK banks are rather exposed to emerging markets; they could suffer if capital surges back into American assets such as the dollar.And that is a worry, given that UK banks are rather exposed to emerging markets; they could suffer if capital surges back into American assets such as the dollar.
Here’s the story:Here’s the story:
Related: Market reaction to US rate rise troubles Bank of England
11.42am GMT11.42am GMT
11:4211:42
You can see the moment that VW announced that its CO2 emissions problems only affected around 36,000 cars, not 800,000:You can see the moment that VW announced that its CO2 emissions problems only affected around 36,000 cars, not 800,000:
11.24am GMT11.24am GMT
11:2411:24
VW: CO2 problem not as bad as thoughtVW: CO2 problem not as bad as thought
Newsflash: The Volkswagen emissions scandal may not be as bad as feared.Newsflash: The Volkswagen emissions scandal may not be as bad as feared.
The Wolfsburg-based carmaker has announced that far fewer vehicles than originally thought have been pumping out more CO2 than claimed, and breaching fuel efficiency figures.The Wolfsburg-based carmaker has announced that far fewer vehicles than originally thought have been pumping out more CO2 than claimed, and breaching fuel efficiency figures.
#BREAKING Volkswagen says carbon emission claims proven to be unfounded#BREAKING Volkswagen says carbon emission claims proven to be unfounded
According to VW, its investigation found that around 36,000 cars are affected, not the 800,000 vehicles initially estimated last month.According to VW, its investigation found that around 36,000 cars are affected, not the 800,000 vehicles initially estimated last month.
Reuters has the details:Reuters has the details:
“Only a small number of the model variants of new cars will have the catalogue (CO2) figure slightly adjusted,” VW said on Tuesday, adding the number of affected cars was equivalent to about 36,000 vehicles.“Only a small number of the model variants of new cars will have the catalogue (CO2) figure slightly adjusted,” VW said on Tuesday, adding the number of affected cars was equivalent to about 36,000 vehicles.
It’s some relief for the carmaker, which will update the media on the emissions scandal tomorrow.It’s some relief for the carmaker, which will update the media on the emissions scandal tomorrow.
Shares in Volkswagen have jumped by 4.5% today, as investors welcome the news. It had originally set aside €2bn to cover the problem; today’s announcement suggests the financial impact will be significantly smaller.Shares in Volkswagen have jumped by 4.5% today, as investors welcome the news. It had originally set aside €2bn to cover the problem; today’s announcement suggests the financial impact will be significantly smaller.
VW is not in the clear, though. The CO2 issue is separate from the original scandal, that millions of cars used secret software to disguise nitrogen oxide emissions.VW is not in the clear, though. The CO2 issue is separate from the original scandal, that millions of cars used secret software to disguise nitrogen oxide emissions.
EIL: Verdacht auf falsche CO2-Angaben größtenteils entkräftet, sagt @Volkswagen, laut @AFP pic.twitter.com/ux85UJqTbNEIL: Verdacht auf falsche CO2-Angaben größtenteils entkräftet, sagt @Volkswagen, laut @AFP pic.twitter.com/ux85UJqTbN
UpdatedUpdated
at 11.34am GMTat 11.34am GMT
10.31am GMT10.31am GMT
10:3110:31
Anglo American’s share price has plunged by 90% since its peak in early 2008, before the financial crisis.Anglo American’s share price has plunged by 90% since its peak in early 2008, before the financial crisis.
It did rally in 2010 and 2011, helped by solid demand from China for its coal and iron ore, as well as platinum and diamonds (Anglo’s other main products)It did rally in 2010 and 2011, helped by solid demand from China for its coal and iron ore, as well as platinum and diamonds (Anglo’s other main products)
But, like other miners, the company has suffered from the emerging market slowdown, which has hurt demand for products like steel.But, like other miners, the company has suffered from the emerging market slowdown, which has hurt demand for products like steel.
#Commodities Watch: @AngloAmerican down 8% (after 12% yesterday) -- and down an eye-watering 91% from record high pic.twitter.com/jlEioywA9q#Commodities Watch: @AngloAmerican down 8% (after 12% yesterday) -- and down an eye-watering 91% from record high pic.twitter.com/jlEioywA9q
10.24am GMT10.24am GMT
10:2410:24
Anyone who received mining shares from Father Christmas last year has our sympathies.Anyone who received mining shares from Father Christmas last year has our sympathies.
Anglo American has had it bad this year, down 75% but not the only one. YTD - Lonmin down 95%, Glencore down 73%, BHP Billiton down 47%Anglo American has had it bad this year, down 75% but not the only one. YTD - Lonmin down 95%, Glencore down 73%, BHP Billiton down 47%
10.23am GMT10.23am GMT
10:2310:23
Mining angst drags FTSE 100 to three-week lowMining angst drags FTSE 100 to three-week low
The slump in Anglo American’s shares (-8.5% at pixel time) has dragged the FTSE 100 into the red.The slump in Anglo American’s shares (-8.5% at pixel time) has dragged the FTSE 100 into the red.
The blue chip index is down 9 points now, hitting its lowest point since 16 November.The blue chip index is down 9 points now, hitting its lowest point since 16 November.
Other mining companies are under pressure too. Fresnillo, the silver miner, is down 6%, while copper producer Antofagasta has dropped by 2%.Other mining companies are under pressure too. Fresnillo, the silver miner, is down 6%, while copper producer Antofagasta has dropped by 2%.
Investors are worried that Anglo may not be the last mining company to axe its dividend in an attempt to preserve capital and ride out the slump.Investors are worried that Anglo may not be the last mining company to axe its dividend in an attempt to preserve capital and ride out the slump.
Alastair McCaig of IG explains:Alastair McCaig of IG explains:
Once again the mining sector is dragging the FTSE lower, although not with the aggression seen yesterday.Once again the mining sector is dragging the FTSE lower, although not with the aggression seen yesterday.
Worries that Anglo American’s actions yesterday might become the template for others in that sector have seen investors running for the exits, as a second day of double-digit falls hit. Cost-cutting and asset stripping have already been exhausted and, as unattractive as it might be, trimming or suspending dividends might be the course of action that others have to follow.Worries that Anglo American’s actions yesterday might become the template for others in that sector have seen investors running for the exits, as a second day of double-digit falls hit. Cost-cutting and asset stripping have already been exhausted and, as unattractive as it might be, trimming or suspending dividends might be the course of action that others have to follow.
Anglo’s decline is eye-watering. My colleague Nick Fletcher flags up that more than £1bn has been wiped off its value since first thing yesterday, when it announced sweeping cutbacks.Anglo’s decline is eye-watering. My colleague Nick Fletcher flags up that more than £1bn has been wiped off its value since first thing yesterday, when it announced sweeping cutbacks.
Related: Anglo American slumps another 13%, losing £1.2bn since restructuring news