It seems like the investors are welcoming the recent comments from the US Federal Reserve. Mr. Jerome Powell, Chairman of US Federal Reserve, has kept the interest rates unchanged which was expected by the market participants. However, it can be said that the sentiments of the investors were supported after the Federal Reserve hinted that they would be patient with the interest rate hikes. On January 30, 2019, Dow Jones Industrial Average closed the session in green as it rose 434.90 points or 1.77% and stood at 25,014.86; however, there was a drop to 24,999.67 on January 31, 2019.
After US Fed kept borrowing cost unchanged, Daily LIBOR, a benchmark of interbank interest rate witnessed its biggest monthly fall since 2010.
Coming back to the European market, on 31st Jan, the Society of Motor Manufacturers and Traders presented investment data for the UK automotive sector. It was highlighted that during CY18, industry witnessed a total investment of 589 million pounds, which is approximately 50 percent down from CY2017 investment figure. Then the market also saw the ‘Dove’ soap maker, Unilever (ULVR.L) reporting weak sets of numbers during the fourth quarter of FY18. Company’s sales grew by 2.9 percent, against the market expectation of 3.5 percent. Unilever said trouble in Latin America and weak sales growth in developing economies impacted the company’s top-line. As per some media reports, Glencore (GLEN.L), a commodities trader, is going to hit a trade deal worth 500 million pounds with Brazil’s Companhia Siderurgica Nacional (CSN) for the delivery of Iron ore over five years.
On 31st Jan, LSE benchmark FTSE 100 index closed at 6968.85, up by 0.39% from previous closing price, and the European benchmark STOXX 600 was seen around 358.29, down marginally.
Global Crude Oil benchmarks, Brent oil, and WTI oil were trading up. At the time of writing, Brent oil was trading at $60.96/ barrel and WTI oil was trading at $53.85/barrel. Tightening oil supply and US sanction on the export of Venezuela’s crude oil are pushing oil prices up in the international market.
Coming to the currency market, pound found support from dovish fed, and GBP/US was trading at 1.31, inched marginally up; and EUR/GBP currency pair was trading at 0.87, although, US dollar index was trading slightly higher.
On LSE, stocks like Antofagasta Plc (ANTO.L), Diageo Plc (DGE.L) and Royal Dutch Shell Plc (RDSA.L) were the top performers on the FTSE 100 index and up by 4.5%, 4.67%, and 3.78%, respectively. On the other hand, stocks like Smurfit Kappa Group Plc (SKG.L), Standard Life Aberdeen Plc (SLA.L) and Tui AG (TUI.L) were among the laggards on the FTSE 100 index and down by 5.17%, 5.06%, and 3.39%, respectively.
As on 31st January 2019, sectors like Energy, Basic Material and Utilities were top performers on the broader index FTSE 100 and on the other side sectors like Financials, Consumer Cyclicals and Technology were the laggards on the FTSE 100 index.
With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities.
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