Mining giants Antofagasta and Rio Tinto helped the FTSE 100 higher on Wednesday as investors digested hotter-than-expected UK inflation and the latest instalment of Trump’s tariff threats.
After trading above 9,000 for the first time in history yesterday morning, the FTSE 100 sold off during the afternoon and finished the session deep in the red.
Despite an overnight wobble in US stocks and UK inflation coming in at 3.6%, London’s leading index was 0.2% higher at the time of writing.
Interest rate futures markets quickly priced in fewer interest rate cuts this year after the latest UK inflation reading, which weighed on UK-centric sectors such as REITs and the housebuilders.
“The spectre of inflation has returned to haunt markets after a period when investors’ attention has largely been centred elsewhere,” said AJ Bell investment analyst Dan Coatsworth.
“UK inflation increasing to an 18-month high in June thanks to higher fuel and food prices will only reinforce concern about inflationary pressures as the market weighs the potential impact on interest rates,” said AJ Bell investment analyst Dan Coatsworth.
Rio Tinto and Antofagasta were among the gainers after the miners released their Q2 production reports. Both rallied in early trade before falling back.
“Rio Tinto delivered a solid Q2 production performance, with standout results in copper and bauxite, and the strongest iron ore production for a second quarter since 2018,” explained Adam Vettese, market analyst for eToro.
“However, despite the headline strength in output, iron ore shipments fell short of expectations and the increasing share of lower-grade SP10 ore raises concerns about price realisations and margin pressure. The reaffirmation of guidance at the low end of the shipment range suggests lingering operational constraints, particularly around logistics and equipment availability, following Q1’s weather disruptions.”
Antofagasta reported a 16.9% increase in copper sales year-to-date.
AstraZeneca offset gains in the miners with a 1.2% loss after a disappointing clinical trial.
“Heavyweight stock AstraZeneca dragged on the index after a late-stage trial on an experimental treatment for a rare condition failed to meet its primary target,” said Coatsworth.
Real Estate Investment Trust Land Securities was the FTSE 100’s top faller with losses of 2%.
An 11% year-on-year rise in Intermediate Capital Group’s AuM sent the stock to the top of the FTSE 100 leaderboard with a 3.5% increase.