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UK Market Declines

6/24/2013 7:35 AM ET

The UK market is trading lower on Monday, as investor sentiment was impacted by concerns about the Federal Reserve tapering the stimulus program. The credit crunch in China added to the woes.

The People's Bank of China said it would fine-tune its policies as needed, suggesting slightly easier monetary conditions ahead as an acute cash crunch exacerbated challenges faced by an already slowing economy.

The bank will continue to implement prudent monetary policy, the central bank said in a statement after a quarterly meeting of the Monetary Policy Committee chaired by Governor Zhou Xiaochuan in Beijing.

Germany's business confidence improved slightly to 105.9 in June from 105.7 in May, reports said citing a survey from the Ifo institute. The reading came in line with economists' expectations.

Debt problems in member states of Eurozone should not stop the European Central Bank from lifting interest rates, Governing Council member Jens Weidmann said in an interview published on Sunday. Neither states nor the private sector should assume that the current low interest rate environment would continue permanently, he told Germany's Sueddeutsche Zeitung.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.21 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is losing 1.12 percent.

The FTSE 100 index is currently losing 1.1 percent.

Vedanta Resources is declining 4.8 percent. Travis Perkins, Croda and Resolution are losing between 3.4 percent and 3.2 percent.

Eurasian Resources Group B.V. offered to acquire the remaining share capital of Eurasian Natural Resources for $2.65 per share in cash and 0.230 shares of Kazakhmys for each ENRC share. Eurasian Natural Resources shares are up 0.9 percent. Kazakhmys is declining 7.8 percent.

Despite the overall negativity, Severn Trent is adding 1.9 percent and United Utilities is gaining 1.5 percent. Temporary power provider Aggreko is adding 1.3 percent.

Essar Energy is gaining 3.7 percent after reporting annual results.

Elsewhere in Europe, the German DAX is dropping 1.2 percent and the French CAC 40 is falling 1.8 percent. Switzerland's SMI is declining 1.9 percent.

Across Asia/Pacific, markets closed firmly in negative territory. Australia's All Ordinaries fell 1.5 percent and Japan's Nikkei 225 dropped 1.3 percent. China's Shanghai Composite Index retreated 5.3 percent while Hong Kong's Hang Seng declined 2.2 percent.

In the U.S., futures point to a lower open on Wall Street. In the previous session, stocks ended mixed as investors continued to react negatively to the prospects of Fed scaling back stimulus. The Dow and S&P 500 rose around 0.3 percent each, while a sharp drop in Oracle shares dragged the tech-heavy Nasdaq down 0.2 percent.

In the commodity space, crude for August delivery is falling $0.10 to $93.59 per barrel and August gold is losing $8.3 to $1283.7 a troy ounce.

by RTT Staff Writer

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