The US economy, quite surprisingly has contracted in the fourth quarter and as US is the biggest trading partner of UK, the stocks have experienced a fall from its highest figures in last 4 and a half years. The benchmark gauge of UK, the FTSE 100 Index plummeted by 17.33 points and is currently at 6321.86. Despite today’s decline, the gauge is still 7.2% higher than where it finished in 2012 and is on course to experience the biggest jump in last 15 months. On the other hand, the broader FTSE All Share Index has declined by 0.3% and the benchmark gauge of Ireland, the ISEQ Index went down by 0.1%.
The largest economy in the world, US experienced a shrank in the 4th quarter, mainly restrained by the biggest drop in the defense spending in the last 40 years and also the dwindling inventory growth. The Gross Domestic Product actually slipped at 0.1% annual rate and this is weaker than any of the economist forecasts. This marks the worst performance of US GDP since 2009’s 2nd quarter, as far as the report released by Commerce Department is considered.
The 2nd biggest tobacco company in Europe, Imperial Tobacco Group went down by 5% after it announced that the first half profits of the company will see a decline. The company is heading towards its biggest drop in last 24 months as each of its shares currently cost 2344 pence. The first quarter revenue for Imperial Tobacco is also likely to be pretty small. The largest cigarette maker in Europe, British American Tobacco, on the other hand, experienced a decline of 1.2% and each of its shares cost 326.5 pence now.
The largest oil service provider in Europe, Saipem cut its profit forecasts and that made investors concerned over the overall revenues generated by the industry. It hit hard Petrofac, the British peer of Saipem as the former saw its share prices plunging by 5.8%. Antofagasta Plc. also experienced a big decline (Actually the biggest in last 14 months) as its projected cost increase. Its shares actually sank by 7% on today. WPP Plc. however had a better fate as the company shares jumped up to a 12-month high figure. Jefferies Group advised investors to buy its shares and this helped the company big time. WPP shares advanced by 1.9%.