The FTSE 100 underperformed Europe again on Thursday as weaker miners dragged on the index.
London’s leading index was flat at the time of writing after trading sideways for most of the session. The losses and gains were marginal but disappointing, considering the German DAX was 0.9% higher.
The FTSE 100 was also unmoved by hopes of a US rate cut that encouraged further buying of US stocks overnight. The S&P 500 closed 0.3% to the good and within touching distance of all-time record highs.
“US stocks pushed through some early jitters, closing higher again, reinforcing the sense that momentum is back as rate-cut expectations firm up,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Investors are leaning into the idea that easier policy is coming, which is fuelling appetite for risk and lifting everything from blue chips to small caps. Still, with inflation data and Fed decisions ahead, the path is far from set in stone. Expectations have swung wildly over the past month, so assuming any cuts are a done deal could be a costly mistake, and volatility can just as quickly return if the rate cutting narrative shifts. One thing’s clear, if markets want a Santa rally, they need the Fed to stay in line.”
Precious metals miners were the biggest losers on the day as gold prices retreated again. Endeavour Mining lost 2.4%.
Rio Tinto was marginally higher and outperforming its mining sector peers as the CEO outlined a new strategy to make a ‘Stronger, sharper and simpler Rio Tinto’.
“Rio Tinto’s recently appointed commander in chief Simon Trott is today unveiling his master plan to investors. There are some bold ambitions here, which if achieved should put the mining giant on a firmer footing,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“Cost reductions and further diversification away from iron ore into future facing metals such as lithium and copper are all on the table. These measures have the potential to grow underlying cash profit by up to 50% by the end of the decade. However, the path to getting here won’t be easy with nearer term guidance looking a little underwhelming.“
Rio Tinto shares were 0.3% higher at the time of writing.
Spirax Group was the top gainer, up 2.4%, as the stock continued a rebound off technical support hit earlier in the week.