FTSE Moves Higher Slowly after Rallying Miners

London Stock Exchange

London Stock Exchange

The FTSE inched its way upwards on Thursday, finally managing to settle its position following intense drops in the course of the last session, supported by a recovery among heavyweight miners who hope for a new wave of international stimulus methods from central banks.

London mining stock prices were keen on tracking more stable copper prices, which were experiencing a gain of 1 percent at a 1-month high, as the overall demand scenario with respect to metals showed considerable improvement based on the expectation of stimulus.

The amount of market speculation of extra financial action from the biggest metals consumer market, China, experienced a sharp rise after the manufacturing sector of the country saw its lowest PMI since the month of November last year.

Shareholders also maintained that the minutes, which resulted from the Federal Reserve policy meeting, held from the 31st of July to the 1st of August, and were published soon after the London close on Wednesday, were indicators that the Fed was in the process of making preparations to begin a quantitative easing scheme for the third time, quite soon.

Weighing in on the Situation

Market analysts hold the opinion that the dovish comments from the Federal Reserve were quite unexpected, especially slight hints that the next portion of QE was likely to be unlimited. They state that if the central bank decides to set a number on the probable QE amounts, the markets are prone to pricing it all in and then becoming disappointed with the resulting scenario. If no fixed figure is set,  markets will not be in a position to do that and the Federal Reserve will possess the majority of the control to make it happen.

The FTSE was up at the close by 0.04 percent or 2.40 percent, at a steady point of 5,776.60, following a complicated session which witnessed the index hit a peak at 5,809.26 before being reduced to a low number of 5,764.02 with most of the movements inflated by light volumes.

On Thursday, the trading volume of the FTSE 100 index was 65 percent of the 90-day daily average.

Impact on the Mining Community

Randgold Resources, the gold producer centered in West Africa, was the greatest riser in the FTSE 100, up by a considerable percentage of 4.2, lifted by both measures adopted to ensure political stability in Mali and the higher cost of gold, where the flagship mine of the company is situated. Randgold recently approved of a new interim government set up in Mali in a move which brings the country a step closer to constitutional organization after the military coup took place in the month of March.

Heavyweight miners still had enough of strength even though reports came in about more disappointing sector profits. Mid cap Petropavlovsk and blue chip Kazakhmys both declared sharp drops in profit earnings. Kazakhmys was the top faller in the FTSE 100 dropping by 3.4 percent.

More than 88 percent of heavyweight miners have skipped expectations in the second quarter after earnings were lessened by more than 47 percent throughout the years. IMI too saw a loss amounting to around 2.6 percent after their engineer issued a warning that the pace of growth was likely to suffer from a slowdown in the second half of the year due to worsening financial conditions in Europe.

Avatar
Jay Raol

Recent Posts

Goldman Sachs invests $69 million in fintech Starling

Goldman Sachs invests $69 million in fintech Starling

Goldman Sachs Growth Equity has invested £50 million ($69 million) in UK digital bank, Starling. The investment is in addition to the bank’s oversubscribed £272 million Ser
13 hours ago
Apple to launch hybrid TV set-top with speaker

Apple to launch hybrid TV set-top with speaker

Apple is bolstering its smart home devices space with the introduction of a new hybrid device— a combination of an Apple TV and a smart speaker with a screen, according to news r
18 hours ago
Leading Japanese automaker Toyota previews the future of EV – the bZ4x

Leading Japanese automaker Toyota previews the future of EV – the bZ4x

One of the most trusted pioneers of technology in the automotive sector, Toyota Motor Corp. has finally revealed the future of the EV segment by showcasing its new SUV, encompassin
18 hours ago
Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes unveils EQS electric sedan to rival Tesla’s models

Mercedes-Benz has unveiled a battery-powered luxury car as part of the brand’s flagship S-Class saloon, designed to compete with Tesla. The 2022 Mercedes-Benz EQS is set to relea
4 days ago
Major US banks report surge in profits for the quarter

Major US banks report surge in profits for the quarter

Three major US banks —JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc.—reported earnings results for the first quarter of 2021.
4 days ago
Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin Price surges above $63,000 ahead of Coinbase IPO

Bitcoin price has once again soared over $63,000 USD as the cryptocurrency market braces for the upcoming Coinbase IPO. The San Francisco-based cryptocurrency exchange platform, wh
4 days ago