FTSE 100 struggles above 7,100; Dow remains flat, Nasdaq trips 1%

US Markets: Wall Street oscillated in the negative region on Friday with all the three major stock averages hovering in the red as market participants react to the mixed employment numbers presented by the US Bureau of Labor Statistics. The equity landscape in the present week has remained extremely turbulent following last Friday’s collapse due to the renewed fears around widespread arrival of the Omicron variant of Covid-19 (SARS-CoV-2) virus.

The investors’ sentiments have been hammered by the resurgence of pandemic-induced restrictions in many geographies outside America with a bunch of European counterparts already reintroducing mini lockdowns, while others a examining the local situations to reimpose fresh set of social distancing mandates and stern curbs to contain the spread of infections associated with the Omicron variant.

In the last six market sessions, the leading market index Dow Jones Industrial Average has fallen on four days, barring the marginal surge on Monday and the so-called meaningful recovery on Thursday this week. The Omicron-led fears have wiped out more than 1,250 points, or 3.51% from the Dow Industrials in a matter of six days.

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The national economic activity witnessed a mixed trend in November of 2021 with the US adding 210,000 jobs, well below the street expectations as enterprises continue to grapple with the dearth of skilled workforce, as a result of which they are unable to hire and deploy adequate number of workers, at a time when most of the businesses look forward to resuming the operations on a larger scale which can help them realise pre-pandemic levels of earnings.

On the other hand, the unemployment rate in the US slipped by another 0.4% to 4.2% in November, sharply low from the rate of 4.6% in October, the data released by the US Bureau of Labor Statistics showed. This has been the lowest rate of unemployment since February 2020, the time when early consequences of Covid-19 pandemic hit the corporate workers. The rate of unemployment in the US is fast approaching the pre-Covid levels as it is only 0.7 percentage points away from reaching the pre-pandemic normal of 3.5%.

The Dow Jones Industrial Average fell 219.12 points, or 0.63% to 34,420.67, the tech leader Nasdaq Composite collapsed more than 2% in the morning trades, while the wider share barometer S&P 500 fell over 1.2%. According to the latest data available with the Nasdaq, the market index plunged 320.54 points or 2.08% to 15,060.78 and the S&P 500 shed 48.55 points, or 1.06% to 4,528.55.

US Market News: Shares of Salesforce.com, Microsoft, Boeing, Visa, JPMorgan Chase, Walt Disney Co, Merck & Co, Apple, Nike and Goldman Sachs crashed 0.4% to 2.4%. The moderate upsurge from 0.4% to 1.2% in stocks of Walmart, IBM, J&J, Home Depot, UnitedHealth Group, Walgreens Boots Alliance, Caterpillar, P&G, Coca-Cola and Travelers Companies helped the index to partly counterbalance the negative points provided the aforementioned heavyweight shares.

Nasdaq Composite movements were majorly skewed by the massive collapse of DocuSign shares as the stock nosedived more than 41% in the turbulent session, dragging the market index further into losses after the San Francisco-headquartered e-signature and electronic agreement services provider failed to impress the shareholders with a lower-than-expected guidance for revenue.

Other than DocuSign, shares of Trip.com Group, Pinduoduo, JD.com and Baidu fell 7-13% experiencing the contagion effect of Didi Chuxing Technology Co decided to delist from the New York Stock Exchange.

UK Markets: Feeling the pressure of subdued Wall Street session, markets in City of London retraced marginal gains with the headline stock average FTSE 100 struggling slightly above the psychological level of 7,100. Shares of the market capitalisation leader AstraZeneca fell nearly 1%, emerging as one of the biggest drags on the index. Shares of Rio Tinto, Glencore, BHP Group and Anglo American fell sharply, these shares cumulatively provided the majority of negative points to the index.

Moderate upswing in the shares of Diageo, Unilever, HSBC Holdings, British American Tobacco, Reckitt Benckiser and Prudential helped in offsetting some of the losses. The stocks National Grid, BP and Royal Dutch Shell were only shares that gained more than 1% among the top 20 components by the market capitalisation.

The domestic benchmark FTSE 100 declined 13.68 points, or 0.19% to 7,115.53, whereas the mid-cap heavy FTSE 250 dropped 57.81 points, or 0.25% to 22,627.03. 

FTSE 100 (3 December)

Source: REFINITIV

Market Snapshot

Top 3 volume leaders: Lloyds Banking Group, Vodafone and BP

Top 3 sectoral indices: Fossil Fuels, Gas and Water and Household Goods

Bottom 3 sectoral indices: Industrial Metals, Health Care and Related Services and Medical Services

Crude oil prices: Brent crude up 2.57% at $71.46/barrel; US WTI crude up 2.26% at $68.00/barrel

Gold prices: An ounce of gold traded at $1,776.20, up 0.77%

Exchange rate: GBP vs USD - 1.3215, down 0.69% | GBP vs EUR - 1.1709, down 0.54%

Bond yields: US 10-Year Treasury yield - 1.399% | UK 10-Year Government Bond yield - 0.7705%

Markets @ 16:20 GMT