By Patrick Munnelly, Market Analyst, Tickmill
The FTSE 100 continues to struggle under the weight of a pullback in commodity prices.
Energy giants BP LON:BP. and Shell LON:SHEL opened the day in the red shedding 1.5% and 1.3% respectively, coupled with a continued retreat in the industrial mining sector being led by Fresnillo LON:FRES -2.2%+ with Anglo American LON:AAL -1.2%+ and Endeavour Mining [LON:EDV] -1.04% holding the trio of bottom spots in the index,
The pullback in the commodity sector continues to be driven by global growth concerns suggesting that a decline in fuel demand will outstrip the OPEC+ supply cuts. For the base metals sector, investors continue to pullback exposure as issues around the China recovery narrative continue to hamper metals performance, given China’s stature as the largest global consumer.
Dowlais Group [LON:DWL] followed through from Friday’s stellar performance racking up a further 5% of gains, as the demerger from Melrose Industries is completed and the business attracts new investment from US based Capital Group Inc. This has helped to drive forward development of the newly independent UK auto supplier.
FTSE-100 flatlining
As Monday’s session draws to a close the FTSE is once again flatlining as action on Wall Street remains less than convincing ahead of a big week of tech earnings with 40% of the S&P500 market cap reporting this week, investors have turned cautious. The FTSE-100 finished the session at 7912.20, down just 0.2%.
Also noteworthy this week, UK investors will see earnings from banking heavyweights Natwest LON:NWG, Barclays LON:BARC and Standard Chartered LON:STAN all coming in the aftermath of the Credit Suisse meltdown. Investors will be parsing reports for any additional signs of contagion risk.
