MARKET WRAP: Miners weigh on FTSE, homebuilders outperform, GBP strong

imageEconomy18 hours ago (Aug 18, 2021 16:35)

© Reuters.

Key Points

  • FTSE 100 closing price of 7,168.91, -0.17%
  • Miners weigh on FTSE
  • Homebuilders strong following data
  • GBP strong as inflation drop seen as temporary
  • Oil attempts to stem losses as inventories fall
  • Bitcoin falls back below 200DMA

By Samuel Indyk – The FTSE 100 finished lower on Wednesday as a fall in metals prices weighed on the sector. A number of base metals declined as the ongoing spread of COVID-19 in the Asia-Pacific region is expected to hamper demand and the ongoing economic recovery.

The lower metals prices fed into the share prices of a number of large-cap, UK-listed miners, including BHP Group (LON:BHPB), Anglo American (LON:AAL), Rio Tinto (LON:RIO), Antofagasta (LON:ANTO), and Glencore (LON:GLEN).

At the other end of the spectrum were the UK-listed homebuilders and other companies associated with the housing market.

Data from the Office for National Statistics (ONS) showed home prices increased 13.2% over the year to June, the fastest annual increase since 2004, as some crisis measures came to an end.

“This figure […] was boosted by large monthly growth, with a rush to complete purchases before changes to the stamp duty holiday came into effect at the end of June,” said ONS head of prices Mike Hardie.

Companies such as Redrow (LON:RDW), Bellway (LON:BWY), Vistry Group (LON:VTYV), Barratt Developments (LON:BDEV), and Rightmove (LON:RMV) all rallied. Persimmon (LON:PSN) shares were also higher after the company reported a 64% increase in pre-tax profit in the first half of the year.

Elsewhere on the data front, inflation in the UK cooled more than expected last month, with CPI hitting the Bank of England’s 2.0% target. Although consumer prices were softer, producer prices paid and charged by factories rose. Output costs increased by 4.9% on an annual basis, the most in almost a decade.

WTI and Brent crude futures were both trading relatively steady, halting a run of losses that stretched to four days.

The Energy Information Administration said US crude stocks declined by 3.234 million barrels in the latest week, more than consensus forecast of a 1.055 million drawdown.

Bitcoin declined after dropping below the 200-day moving average on Tuesday around $45,560. The level then turned into resistance today for the world’s largest cryptocurrency. Despite the pullback, some analysts still suggest that a continued move higher remains likely.

“The greater uptrend remains intact as long as the 50 and 100-day moving averages, both near $38,000, remain intact,” writes OANDA Senior Market Analyst Jeffrey Halley in an emailed note.


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MARKET WRAP: Miners weigh on FTSE, homebuilders outperform, GBP strong

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