Glencore shares crash 29% as European markets slide -- as it happened
Commodity trader and miner Glencore slumps as analysts warn its shareholders could be wiped out
- Glencore shares slump 29%
- Analyst: Glencore shareholders could be wiped out
- Markets hit by commodity gloom
- Volkswagen 'suspends R&D chiefs'
9.10pm BST
Hello again. It was a bad day on Wall Street too, as fears over the global economy and the usual fretting about a US interest rate hike sent shares sliding.
The Dow Jones industrial average has closed down 1.9%, or around 312 points lower at 16002.
S&P below 1900; Nasdaq off 3% as biotech weighs http://t.co/DK0ZfxBGWg pic.twitter.com/ZhDPfzEK4g
The Dow ended down more than 300 points: http://t.co/Xrd7i3ruLH pic.twitter.com/gBvZWCjJgb
5.35pm BST
It's been a surprisingly busy Monday here in Europe, so let's recap the main points.
5.14pm BST
There were chunky losses across the Big 5 European stock markets tonight.
5.03pm BST
Volkswagen shares have been hit hard again, closing down 7.5% in Frankfurt tonight.
The emissions scandal is starting to look like a real albatross around the neck of the automotive sector.
The choice of Matthias Mi1/4ller as new VW chief is a positive first step to address the emissions scandal but the concern is that the selection of the Porsche CEO is too insular and won't provide the kind of culture change needed.
5.02pm BST
4.54pm BST
Wow. After a traumatic session, Glencore shares have closed for the day down a staggering 29% at around 69p, a new alltime low.
Those fears that the company's shareholders could be wiped out, unless commodity prices recover, have sparked a remarkable rout today.
Downbeat [industrial profit] numbers out of China overnight plus the prospect of US rate hikes making dollar denominated commodities even more expensive once again took the shine off the situation.
3.55pm BST
Every major Western stock market is in the red right now:
3.33pm BST
The FTSE 100 has now shed 2.1%, today as the mining sector rout continues.
Widening losses for the FTSE saw the index fall below the 6000 level it has struggled with all month, spurred on by a truly dismal showing from its commodity stocks. Sharp declines for Brent Crude and copper (as the metal barely kept its head above the 6 year lows seen in August) had serious ramifications for the oil and mining sectors, with the latter having an astonishingly bad day.
Anglo American approached its lowest price since its IPO in 1999, whilst Rio Tinto shed 100 points and KAZ Minerals plunged by 20%. Of course, the worst performer remained Glencore, which spent the day dipping its toes in fresh all-time lows as investors began (or rather, continued) to run out of patience with the stock.
3.06pm BST
Another Volkswagen shoe has dropped, with Skoda announcing that it sold 1.2m cars containing the devices used to trick emissions testers.
2.45pm BST
The New York stock market has opened in the red, echoing the falls in Europe today.
The Dow is down by around 0.7%, or 116 points, in early trading.
And the week starts with a whimper http://t.co/fMo7VfraL9 pic.twitter.com/uJuOkvgPOw
2.32pm BST
Sir Richard Branson has found a silver lining in the dark cloud enveloping Volkswagen.
The Virgin Group chief told CNBC that the emission test revelations should encourage manufacturers to develop clean energy, and move away from diesel cars.
"What's happened to Volkswagen is actually positive news in that hopefully the car manufacturers will do the right thing and will invest in the future."
The VW cheating scandal may be 'positive news,' @richardbranson says http://t.co/E68L7V146M pic.twitter.com/r0Dn91q1NM
2.19pm BST
Currency Wars can work wonders for exports.
That's according to new research from the International Monetary Fund, which found that a 10% fall in the value of a nation's currency can boost exports by an average 1.5%.
Related: IMF currency study shows power of devaluation
2.07pm BST
A Glencore director just told us: "we are under hedge fund attack but don't know why"
1.50pm BST
Another new low for Glencore.... shares just slumped to 66.67p, down 31% today.
*GLENCORE EXTENDS LOSSES; FALLS 30% IN LONDON TRADING
1.27pm BST
Glencore isn't the only mining company having a bad day. Shares in Anglo American are down 8.6%, on track for a record low.
#COMMODITIES MELTDOWN: #Mining company @AngloAmerican heading to its lowest since London IPO in 1999 pic.twitter.com/LGr1axXzGr
1.26pm BST
Germany's deputy finance minister, Jens Spahn, has admitted what we already suspected -- the Volkswagen emissions scandal could hurt the country's economy.
Spahn told a conference today that:
"The car industry is crucial for the German economy. It [the emissions scandal] can have a big impact on the German economy. This should worry us a little."
1.23pm BST
Shell's decision to abandon drilling in the Arctic (see earlier post) has been welcomed by the Green Party.
"Campaigners against dirty energy will breathe a sigh of relief today. The decision was clearly a reaction to low oil prices and reflected the growing importance of renewable energy sources.
"Shell and other oil and gas companies do not have a good track record when it comes to environmental safety. As we head to the Paris climate change talks later this year, global leaders must make a commitment to ensuring that fossil fuel reserves are kept in the ground, as the science dictates. We cannot allow Shell and others to return to the Arctic."
1.14pm BST
#Glencore -30% and into another volatility auction. $GLEN printed low so far 69p, where will the sell-off end? RO
1.14pm BST
As the gloom deepens over Glencore, the cost of insuring its debt against default has jumped sharply to a record high.
A credit-default swap that would pay out if Glencore defaulted has jumped from 554 basis points on Friday to 708 basis points today. That means it would cost 700,000 per year to insure 10m of five-year Glencore bonds.
12.18pm BST
The VW story is rattling along fast today; with German prosecutors announcing they have started an investigation against former Volkswagen CEO Martin Winterkorn.
"allegations of fraud in the sale of cars with manipulated emissions data".
11.58am BST
It's a bleak morning for workers in Redcar, in the North East of England.
The town's iron and steel making plant is to close, with the loss of 1,700 jobs, following the slide in steel prices.
Redcar steel plant to close with 1,700 job losses http://t.co/J2y2ZiPjma
"Redcar was built on steelmaking, Teesside was built on steelmaking.
It's about generations of people that have worked in that blast furnace and fought so hard, not just in the last few days but in the last few weeks, months, years, to keep steelmaking alive. It's just been allowed to fizzle out."
So @annaturley says Redcar steel closure "devastating" and "a massive hammer blow to our community".."Mothballing needs to be done properly"
11.43am BST
The slump in Glencore's share price has hit founder Ivan Glasenberg in the pocket.
He owns over 8% of the company, which was worth 6bn when Glencore floated in 2011. The crumbling share price means its now worth under 1bn, by our calculations.
Ivan Glasenberg down to his last 1bn in Glencore shares (was 6bn-ish once upon a time). http://t.co/L77oMYwj52
11.29am BST
The word 'rout' doesn't really do justice to Glencore's share price today:
-27% #GlencoreWatch pic.twitter.com/IWJk0J4fNJ
When you know a stock is screwed = a 27% move lower on the day on no real news.
10.55am BST
We have another development in the Volkswagen scandal -- Audi has revealed that 2.1 million of its cars worldwide were fitted with software to cheat emissions tests.
This covers 577,000 cars in Germany, 1.42 million in other Western European countries, and 13,000 in the US. Audi added that its A1, A3, A4, A5, A6, TT, Q3 and Q5 models are affected.
#BREAKING VW Scandal: Audi says 2.1 million cars worldwide fitted with emission-cheating software.
10.19am BST
Back in Frankfurt, Volkswagen shares have slumped by 6% as the emission scandal casts a fog over Germany.
Other carmakers are leading the DAX fallers too:
How bad are things for Glencore? Here's its share performance compared with VW since Sept 16. pic.twitter.com/thDy46BzXc
10.11am BST
Here's the key slide from today's Investec report, showing how Glencore investors could be flattened unless commodity prices scramble back.
Investec: if commodity prices stay where they are, the equity value in Glencore will be wiped out vs its debt. pic.twitter.com/Q3tzCUatvT
Assumes a) valuation for the stock of 15x earnings b) not netting off Glencore's trade inventory from its debt (as the company wants you to)
10.09am BST
Glencore is turning into one of the greatest destructions of shareholder value in recent years.
Its shares have fallen steadily since floating just four years ago - today's selloff means they've lost 84%.
Glencore getting battered. - off 17% pic.twitter.com/Ej2NZJEZXx
9.59am BST
The Volkswagen emissions scandal has taken another twist.
There are reports that the heads of research and developments at its VW, Porsche and Audi divisions have just been suspended:
Reuters: Volkswagen's board has suspended R&D officials of VW passenger cars, Audi and Porsche in the emissions scandal
This is a serious matter. Volkswagen must clarity what went wrong, how it went wrong, and how it can be repaired.
9.56am BST
City firm Investec appears to have triggered the rout in Glencore's shares today, with a very bearish analyst note.
Investec warned that Glencore's equity value could be wiped out unless the prices of key commodities (such as iron ore and copper) pick up.
"The challenging environment for mining companies leads us to the question of how much value will be left for equity holders if commodity prices do not improve."
9.35am BST
Yikes - Glencore shares are now down by 10%, as analysts speculate that investors could be wiped out.
Another bad day at the office for Glencore (-10.4%) - Investec warned there's little value for shareholders if low commodity prices persist
Investec:"If major commodity prices remain at current levels (...) nearly all the equity value of both Glencore and Anglo could evaporate"
9.25am BST
Shares in commodity trading firm Glencore are slumping to fresh record lows today.
9.13am BST
Back in the UK, German discount supermarket chain Aldi has announced it will start selling goods over the internet.
8.44am BST
In the oil sector, Royal Dutch Shell has abandoned its plans to drill off the coast of Alaska.
The company admitted this morning that its "Burger J" exploration well, located in Alaska's Chukchi Sea, had proved disappointing.
For an area equivalent to half the size of the Gulf of Mexico, this basin remains substantially under-explored.
Shell has found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect.
Shell halting Arctic drilling. Oil prices and technical challenges doing what Greenpeace couldn't. http://t.co/Hhb0XXPfmZ
8.27am BST
Shares in mobile giant Vodafone have fallen by 3% this morning, after talks with rival Liberty Global over asset swaps floundered.
8.26am BST
European stock markets are all as red as the moon this morning:
The negative opening comes after August Chinese Industrial Profits declined at their fastest annual pace since records began four years ago, with growth hurt by currency devaluation and financial market volatility, which just adds to the growing slowdown worries overshadowing the world's #2 economy and impacting the commodities space.
A pro-independence win for the Catalonia electorate also adds to Eurozone political risk, showing desire for the key state to break away from Spain and means the likelihood of an official Scottish like 'Yes or No' vote in the next 18-months.
8.18am BST
A majority of seats will see #Catalan separatists become more assertive. Minority of vote share will constrain their pace and tactics.
8.11am BST
Catalonian debt is falling in value this morning after separatists took control of Catalonia's regional government last night, possibly heralding another chapter in the eurozone crisis.
"We won," said Catalan leader Artur Mas i Gavarro, as a jubilant crowd waved estelada flags at a rally in Barcelona. "Today was a double victory - the yes side won, as did democracy."
After attempts by Catalan leaders to hold a referendum on independence were blocked by the central government in Madrid, Mas sought to turn the elections into a de facto referendum, pledging to begin the process of breaking away from Spain if Junts pel Si won a majority of seats.
#Spain's govt bonds start a tad higher as Catalan Separatists fail to get outright majority. 10y yields drop to 2.02% pic.twitter.com/xJwaoQ42S7
7.47am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
A new week begins with another bout of worries over the global economy, and a new political headache for Europe's leaders after Sunday's Catalan election.
Chinese industrial profits data came in below consensus expectations and immediately spurred selling in Chinese and Japanese markets....
Chinese industrial profits prompted further concerns about the economy as they declined 8.8% from a year earlier. Mining, coal, oil & natural gas all continued to see profit declines between 40-68%.
With Fed officials seemingly intent on raising rates this year come what may, there is a fear that the Fed might be on the cusp of making a big mistake.
It still remains far from clear how weak or otherwise economic conditions in China are, with Nike's quarterly results showing some decent numbers in the China region, however concerns remain about the weakness of the manufacturing sector.
China stocks fall to one-week low as industrial profits slump http://t.co/kluXy8u31P pic.twitter.com/hDvmTcSaxD
Related: Catalan elections: secessionists claim victory - as it happened
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