FTSE closes down 32pts as miners pull Index lower

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 […]


Blue avatar for FOREX.com guest contributors
By :  ,  Financial Analyst

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.

Related tags:

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar