Stock Market News Today 2018/08/30
FTSE 100 UK >>> Consumer borrowing growth slows sharply.
Consumer borrowing growth dropped sharply in July, lowering the rate of annual change to the lowest level since November 2015, according to Bank of England data.
Banks lent £0.8bn in July, down from £1.5bn in June due to falls in both the volume of credit card lending and other loans, which includes car finance. The annual rate of consumer credit growth was 8.5 per cent, the slowest rate of annual growth in just under three years.
The BoE warned that the data were volatile. This is the second time this year that borrowing dropped sharply in a single month.
In March the level of consumer credit growth dropped to the lowest level since November 2012, though it rebounded in the following months.Consumer credit growth has slowed this year as a boom in car finance that began in 2015 has lost steam.
Monthly mortgage lending volumes also fell. Households borrowed £3.2bn secured against property, the lowest level since April 2015.The number of mortgage approvals for house purchase fell to 65,000 down from 65,600 in June. This was in line with market expectations.
Meanwhile small businesses repaid £437m more than they owed during July and large businesses borrowed £3.1bn.
DAX 30 >>> German finance minister calls for industrial policy revival.
German finance minister Olaf Scholz has called for a revival of industrial policy aimed at strengthening the European financial sector, and suggested a Frankfurt-based global bank should play a role in a “reordering” of Europe’s banking industry.
Asked about his view on potential banking mergers at a conference organised by German business daily Handelsblatt, Mr Scholz said on Thursday that the “question how to achieve the biggest stability [of the financial sector] that is needed to keep up globally” should be discussed.
When it comes to a reordering of the wider European financial sector, it was “clear” that this “should be possible” with a large Germany- or Frankfurt based lender, he said.
The German government holds a 15 per cent stake in the country’s second-largest lender Commerzbank, which is often rumoured as a potential takeover target for European rivals. Bankers and consultants in Frankfurt argue that the most likely consolidation scenario is a tie-up between Deutsche Bank and Commerzbank.
The Social Democrat, in his job since March, argued that the demise of German banks on the global stage since the financial crisis has created a problem for the country’s companies.
“The banks that are doing business here don’t have the scale and global footprint that is necessary to escort the corporate sector [on the world market],” said Mr Scholz, adding that strong banks are a question of national sovereignty.
“We will only be able to seize our global opportunities if we have an efficient financial sector.”
Mr Scholz stressed that industrial policy had fallen “out of fashion” in recent decades. “This did not benefit our economy,” said the finance minister, adding that industrial policy deserves a “re-appraisal” in the political debate.
Natural Gas >>> Russian oil and gas groups shrug off sanctions.
Higher energy prices and a weakened rouble saw second-quarter profits soar at three of Russia’s largest oil and gas groups, underlining a strong earnings season for the country’s energy industry that has weathered international sanctions to reap strong earnings.
Gazprom, the world’s largest gas producer, said that second-quarter profits had risen an annual 440 per cent, as both exports to Europe and average prices jumped.
Lukoil, the country’s second-largest oil producer, reported a 21 per cent rise in profits, while profits more than tripled at Surgutneftegas, the country’s number four crude producer.
“Similar to other Russian oil producers, Lukoil benefited from 20 per cent spike in the rouble-based oil price,” said Kirill Tachennikov, senior oil and gas analyst at BCS Global Markets in Moscow.Those results boosted energy stocks across Moscow’s main exchange, with the oil and gas index up 1.7 per cent at 1530, outpacing a 1.1 per cent rise across the wider market. Gazprom shares were up 1 per cent, Lukoil shares were 1.3 per cent higher and Surgutneftegas stock was up 1.7 per cent.
A higher crude price because of a deal between Opec and Russia to curb production and a weaker rouble caused by US sanctions against Moscow have boosted earnings across Russian energy companies this year, prompting increased dividends and share buybacks. Average oil prices were 11 per cent higher during the April-June quarter compared with a year previously, while the rouble was 9 per cent weaker.
S&P 500 >>> Canada seeks deal as Republicans warn Donald Trump on Nafta.
US and Canadian officials have begun detailed negotiations aimed at overhauling the Nafta trade pact with a tight deadline of Friday, after the Trump administration clinched a separate breakthrough with Mexico.
Chrystia Freeland, Canada’s foreign minister, said on Wednesday she was “optimistic” about the prospects for “productive conversations” as she entered a second day of meetings with Robert Lighthizer, US trade representative, in Washington.Ms Freeland said she had already spoken on the telephone with Mr Lighthizer early on Wednesday, and had met Ildefonso Guajardo, the Mexican economy minister, in town following the Mexico-US talks, on Tuesday evening.
“We will . . . stand up for the Canadian national interest, and for Canadian values, while looking for areas where we can find a compromise,” Ms Freeland said on Tuesday. “This is going to be a full-steam ahead effort,” she added.
Donald Trump’s deal with Mexico on Monday to revamp Nafta had come with a threat by the administration to leave Canada out of the pact if it did not come to the table. The stance taken by the US widened a rift between the White House and Capitol Hill.