Commodity Commotion

The FTSE100 is sharply down, dragged lower by London’s hefty Resource sector (20% of the index).

Commodity Commotion

The FTSE100 is sharply down, dragged lower by London’s hefty Resource sector (20% of the index). Miners are hurting from the combination of stronger USD and sharply lower metals prices (copper at 12-month lows, gold close to 13-month lows), while the oil majors BP and Royal Dutch Shell are weighted down by the unexpected build in private API crude oil stocks last night, which sent Brent Crude international marker lower. Investors are also nervous over the geopolitical back-and-forth between US and Turkey, as neither side appears ready to back down over the recent confrontation that sent the Turkish lira to new lows and raised a spectre of FX contagion across Europe.

Contributors: FTSE -60pts, pressured by the Miners (weak RMB, strong USD, copper prices falling), Energy (oil prices falling,  strong USD), HSBC/VOD/PRU (heavyweight, negative momentum), BATS/DGE/RB (profit taking) and BARC/LLOY/STAN (risk off). Struggling to keep FTSE afloat at GSK (positive HIV drug trial), WPP (momentum) and ADM (results).

Technicals: The FTSE100 is aggressively testing the floor of a steep week-long falling channel

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Categories: Analysis, News
Tags: FTSE 100

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