FTSE under pressure as miners suffer

Weakness in metal prices has been a drag on the FTSE, amid an already tough time ahead of a potentially hawkish BoE tomorrow. Meanwhile Bitcoin enters bear market territory as Wall Street has its say.

  • FTSE regains ground after tough start
  • Miners dragging FTSE due to weaker metal prices
  • Bitcoin enters bear market territory

The FTSE has tried its best to regain lost ground today, with the hawkish connotations associated with yesterday’s rise in UK inflation driving early losses. The failure of UK wage growth to keep up with the incessant rise in in UK inflation is creating a widening gap which will drive down real incomes, hurting consumption driven economic growth. The UK economy remains the ongoing theme of the week, with the Bank of England expected to provide a more hawkish statement at tomorrow’s meeting.

Miners provided a drag upon the FTSE 100 throughout today’s session, as the deterioration in both precious and industrial metals dragged the likes of Antofagasta, Anglo American, Fresnillo and Glencore to the bottom of the leaderboard. Copper was today’s big loser amongst a sea of red for metals, while a selloff in gold in the face of equity market weakness saw the precious metal finally trade like a physical commodity rather than just a safe haven asset.

Bitcoin has grabbed the attention of traders once more, with Wall Street stalwarts Jamie Dimon and Mohamed El-Erian both doing their best to talk down the hopes of this new disruptive technology. With Bitcoin falling over 23% in less than two weeks, we have now seen the cryptocurrency break into bear market territory. Past experience tells us that Bitcoin will likely brush these latest challenges aside, yet with Chinese regulators clamping down and big name financial leaders talking Bitcoin down, this has been a tough fortnight for cryptocurrencies.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.