The FTSE 100 fell 0.3% to 7,046 on Tuesday morning and “metals and minerals are principally to blame”, says AJ Bell investment director Russ Mould.
It was “in part caused by concerns about Covid spreading across Asia again and how that might affect commodities demand. That worry was also behind share price weakness in luxury goods companies including Kering and LVMH, down between 3% and 4%.”
“If mining stocks are bellwether for the global economy, then investors need to sit up and take notice that the sector has been one of the worst performers in the past month,” Mould added.
The luxury goods sector enjoyed a strong run earlier this year as investors speculated that the wealthier got even richer during the pandemic as they were trapped at home, with no fancy trips or outings.
“As restrictions eased, luxury goods companies were expected to see a big surge in sales as wealthier individuals splashed their cash.”
FTSE 100 Top Movers
JD Sports (7.72%), Royal Mail (1.54%) and Bunzl (1.52%) are leading the way on the FTSE 100 on Tuesday.
At the other end, Ocado (-2.61%), IAG (-2.53%) and Burberry (-2.48%), make up the bottom three.