Mining stocks help drive FTSE gains

Rising commodity prices are helping to lift UK-listed miners today, with hawkish Yellen comments being largely disregarded.

• European markets on the rise, with vaccination efforts signalling strong second half.

• Yellen comments fail to stifle rebound.

• Mining stocks lead the way, as commodities continue to surge.

European markets are leaving the pessimism of yesterday behind, with commodity-focused stocks helping to drive UK markets higher in early trade. Coming off the back of a sharp pullback in European markets, today’s recovery highlights the underlying level of confidence that is building as the vaccination programmes throughout Europe gather momentum. Despite having seen huge economic implications throughout the region, the focused vaccination efforts in Europe bring confidence of a swift rebound in the coming months. From a US perspective, the aim to vaccinate 70% of the population by 4 July brings great expectations that the second half of 2021 will bring a huge influx of spending and economic activity.

Questionable comments from Janet Yellen have failed to dent market sentiment today, with the Treasury Secretary stating that the Biden stimulus plans could result in inflation and potential monetary tightening. While Yellen belatedly rowed back on her somewhat hawkish comments, markets thankfully seemed somewhat willing to make peace with the fact that inflation remains a risk going forward.

Mining stocks are enjoying a welcome boost in early trade today, with surging prices across a host of commodities driving up valuations in the sector. Copper prices have been rising steadily of late, with prices touching $10,000 as inventories dwindle in the face of insufficient supply. However, that is a story told across the board, with the likes of Lumber experiencing almost exponential growth over the past year. With western nations planning a raft of infrastructure spending in the coming years, there seems little sign that this commodity boom is about to end.

Ahead of the open we expect the Dow Jones to open 97 points higher, at 34,230.