FTSE closes down 32pts as miners pull Index lower

<p>The FTSE 100 suffered losses of 32pts or 0.56% on Wednesday in yet another quiet trading session as selling in the mining sector proved to […]</p>

The FTSE 100 suffered losses of 32pts or 0.56% on Wednesday in yet another quiet trading session as selling in the mining sector proved to be a heavyweight drag on the UK index.

The FTSE 350 mining sector lost 2.24% on the day to hit its lowest levels since 3 August as investors wound down risk exposures ahead of the Jackson Hole economic symposium later this week where Ben Bernanke is set to speak on Friday. Global growth concerns remains a key issue affecting sentiment but right now most traders and investors are in wait and see mode as they sit patiently on the sidelines to hear plans by central bankers on how they plan to stimulate flagging growth.

The Bernanke speech on Friday at Jackson Hole alongside the ECB meeting on 6 September may well prove to be key dates in helping to shape how the markets trade from September to year end.

A short term 6 month Italian bill auction progressed smoothly this morning as expected, with the issue well covered and average yields falling from 2.45% in a similar auction a month ago to 1.585% this time around. Tomorrow’s five year and ten year €6.5bn Italian debt auction will be of much greater importance however and whilst yields are also expected to fall, the scale at which they do will help investors to gauge euro sentiment further.

US GDP was upwardly revised for the second quarter as expected to 1.7% from a preliminary reading of 1.5%. The surprise of the day however came in terms of pending home sales in the US, where sales rose a strong 2.4% on the month hitting a two year high in the process. The reading was much stronger than a 1% increase predicted by most analysts. A concern in this reading however was that sales strength may convince Bernanke to tone down his speech in Jackson Hole. Personally I find it unlikely this sales reading will dramatically change the rhetoric of his speech in its own right. the question remains whether the Fed will simply mention the tactics it has in its armoury or whether it will act soon.

Glencore shares was the top faller on the UK Index, losing 4% after it emerged that a Norwegian wealth fund which has been buying up a minority stake in the commodities trader is set to reject merger plans. The rejection would see the fund  align itself with the Qatari sovereign wealth fund who has already publicly stated their own objection to the terms offered, seeking a higher premium.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.