London View

S&P Declares Argentina Default, Shell Reports Strong Q2 Earnings

Debt negotiations between Argentina and a group of hedge funds fell through yesterday, with S&P subsequently declaring that Argentina was effectively in default and downgrading the country’s credit rating accordingly, from CCC- to ‘selective default’. There are likely to be fears about a potential run on the country’s $29 billion of international bonds, with investors potentially demanding their money back.

Oil giant Shell has reported a 33% jump in Q2 2014 earnings, just two days after rival firm BP reported a 34% increase of its own. BP’s share price is currently up by around 0.6% at 484.90, with the company taking a hit earlier this week as further sanctions were imposed on Russia; BP is the largest foreign investor in Russia’s Rosneft. Shell also has business in the region – as do most oil companies of a certain size – but has been less effected by the sanctions fallout, with shares currently trading around 4% higher at 2,589.00.

The DAX is down almost 0.9% at 9,508.78 after bad unemployment numbers for Germany this morning showed a decrease of -12k, worse than the -5k expected and far below the 7k increase last month. General unemployment numbers for the Euro-zone are due this morning at 10:00 BST.

Over in Asia the Tokyo stock exchange is considering expanding its trading hours; the JPX is currently open for five hours a day, compared to 8.5 in London. Discussion has centred around whether to extend current trading hours or to operate a separate night session. Whilst the former may be more convenient for workers on the actual exchange, the latter would bring stock exchange hours much closer to the European open. Talks are ongoing.