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Market Update

Volatile European Markets Turn Lower on Weaker Commodities

Author: Lucy Stoeva
Last Update: 3:05 PM ET March 15 2016

4:00 PM Frankfurt, Germany – European markets fell on lower commodity prices and on weakness in Asian markets. Antofagasta canceled its final dividend. Galenica confirmed the corporate split-off plan. Numericable-SFR said adjusted operating earnings rose 20% in 2015.

European shares retreated Tuesday on lower commodity prices and weakness in Asian markets after the Bank of Japan left its policy unchanged.

The Bank of Japan indicated that the central bank could lower rates deeper in the negative zone if the economic outlook doesn’t improve.

Rates in Japan are already in the negative zone and the Bank of Japan is encouraging banks to lend and not park money with the central bank.

Metals mining stocks, heavily weighted in the UK FTSE 100 index, tumbled on the decline of copper prices and the base metal extended losses of 25% in 2015.

Antofagasta, the Chile-based copper producer, lost 4.5% after canceling its final dividend.

Shares in BHP Billiton tumbled 6.5%, Glencore retreated 4.8%, and Rio Tinto was down 4%.

Oil prices also continued to decline. Brent crude oil futures fell 2.4% to $38.58, while WTI crude oil eased 2.9% to $36.12.

This week investors expect the U.S. Federal Reserve to stay on the course at the end of meeting on Wednesday.

The Bank of England and the Swiss National Bank are scheduled to announce monetary policy decisions on Thursday.

In the UK, a poll conducted by Telegraph newspaper, showed that 79% of the respondents in favor of the Brexit, or the U.K. exit of the European Union, will vote in the referendum in June, compared with 72% of those against the Brexit.

In London, the FTSE 100 index fell 29.7, or 0.48%, to 6,144.86, while in Berlin, the DAX index lost 46.97, or 0.47%, to 9,943.29.

In Paris, the CAC 40 index declined 33.15, or 0.74%, to 4,473.44.

Galenica Group shares plummeted 13.8% to 1,334 Swiss francs after the healthcare company confirmed the split of the group in two independent companies.

Net profit before deduction of minority interests soared 18.6% to 370 million Swiss francs and by 5.8% to 301 million francs after deduction of minority interests.

EBIT jumped to 450.8 million Swiss francs in 2015, compared with 370.2 million francs in 2014.

Galenica Group said its division into two independent listed companies is planned for the fourth quarter of this year.

The two companies will be based on the group’s two business units - Vifor Pharma and Galenica Santé.

The company proposed a dividend of 18 Swiss francs per share, compared with 15 francs a year earlier.

Legal & General Group Plc dropped 6.3% to 228.2 pence despite the solid growth in operating profit of the British insurance and investment services provider.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc