Mining stocks lead FTSE downturn on weak metal prices
The FTSE 100 index has opened lower this morning due to weakened commodity prices, disappointing home sale data from the US and a resurgence in global economic recovery concerns. Mining stock is leading the charge for losses with tin, copper, nickel, gold, silver and aluminium prices all between 0.1 per cent and 3.8 per cent down.
Kate Neilson
shareprices.com - Wednesday, June 23, 2010
The UK’s blue-chip index shed 50 points to 5,195.26 within minutes of the market opening this morning, losing almost one per cent. It has somewhat recovered by 09:40BST though, currently standing at 5,220.70, down just 0.5 per cent. A mild turnaround will ease some concerns for investors after the top UK index shed one per cent yesterday following Chancellor George Osborne’s Budget announcement. And, despite mining stock dominating today’s early retreat, analysts are citing the losses for miners as a return from unrealistic gains on Monday after China had announced it would make the yuan more flexible to improve imports in the country.
Less than encouraging home sale data from the US late last night did nothing to help commodity stocks with hopes of the Chinese currency lifting the global economy fading further today.
Xstrata (LON:XTA) heads the fallers list, losing 27p, the equivalent of 2.7 per cent. Rio Tinto (LON:RIO), Lonmin (LON:LMI), BHP Bilton (LON:BLT), Antofagasta (LON:ANTO), Anglo American (LON:AAL) and Kazakhmys (LON:KAZ) are all between 1.6 and two per cent down as well to complete a dominant losses performance for the sector.
Oil and gas stocks haven’t suffered as much from the US house sale report and the lack of confidence in the stability of the yuan. Brent Crude was also one per cent down today, dropping to $78.72 per barrel, but Cain Energy (LON:CNE) and BG Group (LON:BG) are both posting gains of 1.3 and 0.3 per cent respectively. BP (LON:BP) also gained 1.3 per cent after the share price hit a fresh 13-year low in yesterday’s session. News about the oil leak in the Gulf of Mexico has quietened as reports focus on yesterday’s Budget and England’s vital game in the World Cup today that could see the team eliminated prematurely.
It’s a mixed session for banking stocks. Investors will be critiquing the impact of the levy that will be imposed on the sector in 2011. Barclays (LON:BARC) shed 1.2 per cent, HSBC (LON:HSBA) is down 0.3 per cent and Standard Chartered (LON:STAN) is down at the rate of 1.3 per cent. But part-nationalised banks Lloyds Banking Group (LON:LLOY) and RBS (LON:RBS) are posting strong gains of 2.2 per cent and 0.2 per cent respectively with the levy amount being less severe than first anticipated.
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