Federal Reserve rate cuts may be good for US homeowners, but the reaction on the global stockmarkets...
Federal Reserve rate cuts may be good for US homeowners, but the reaction on the global stockmarkets has not been as favourable as expected, and some firms are still finding the environment much harder than anticipated.
Construction firm Hanson has so far taken one of the biggest knocks this morning, after reported its first-half earnings are likely to be seriously hampered by a $64m charge for 21,000 new asbestos claims in the US.
This pushed the Hanson share price down 29.5p or 8% to 339p which is turn has forced the FTSE 100 down 17.8 points or 0.4% to 4050.
Media firms are also in the spotlight today as it appears confidence is waning.
Pearson Group, the publisher behind the Financial Times, has also fallen 10p or 1.8% to 562p as one of its shareholders, French investment firm Eurazeo SA, is reported to be selling its 1.8% holding in Pearson.
The aim of the sale is apparently to raise around 800m euros so the group can become a buyout firm, according to reports published in the FT.
Trinity Mirror, which fought a fierce price war with The Sun earlier this year, is today down 5p or 1.2% to 431.5p as its advertising revenue in the six months to June 29 appears to be unchanged compared to a year ago. Trinity argues the market is still volatile.
Asia reacted more to the strength of the dollar again that to the US rate cut, but big names still seem to be very dependent on what happens with the currency to ensure their profit success.
It was the Topix, rather than Nikkei 225 which rose in Japan today, closing just 0.4% up to 887.76, while the Nikkei lost a little ground to 8923.41.
Nissan Motor Co was one of those who needed to see improvements to the dollar so gained an extra 2.5% to Yen1,088, but trading may have been helped by suggestions that it will meet full-year earnings forecasts.
Similarly, Honda Motor Co saw its share value climb 1.8% to Yen4,470 yen, on the back of anticipated improvements to its profit potential.
Both firms rely heavily on their US exports, so a Yen 1 movement against the dollar can have a Yen12bn impact on Honda's operating profit and a Yen 1 gain in the dollar will effect Nissan's pretax profit by Yen 9bn.
Elsewhere in Asia, the Hang Seng index fell 0.2% but indices in South Korea, China, Thailand, Indonesia and India made gains.
And in the US yesterday, the US rate cut to 1% did little to help any of the indices, as analysts were disappointed the rate cut wasn't bigger.
The Dow Jones closed down 98.32 points or 1.08% to 9,011.53 while the Nasdaq lost 2.95 points or 0.18% to 1,602.66 and the S&P 500 index fell 8.13 points or 0.83% to 975.32.
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