FTSE 100 dragged down by mining and financial stocks

by Jonathan Adams
financial stocks

The blue-chip FTSE 100 index closed 0.4% down, snapping a four-day winning streak

London’s FTSE 100 dropped on Thursday, dragged down by heavyweight mining and financial stocks, as investors weighed risks from rising COVID-19 cases globally and supply chain disruptions.

The blue-chip FTSE 100 index closed 0.4% down, snapping a four-day winning streak, with Rio Tinto, BHP Group, Anglo American and Polymetal International being among the top drags.

The domestically focussed mid-cap index eased 0.1% after reaching record highs in the previous session, with travel-related stocks leading the declines.

Broadly speaking we’re seeing a lot more caution in the market today ahead of tomorrow’s event and some profit taking may be kicking in some of these commodity markets alongside a little bit of risk aversion, said Craig Erlam, senior market analyst at Oanda.

The FTSE 100 has recovered 10.2% so far this year on easing COVID-related restrictions and dovish central bank policies. The index had slumped 14% last year amid the pandemic.

The FTSE 100 still underperforms its European and U.S. peers as it is more likely to be affected by global factors such as a weaker dollar as most companies listed on the index have a wider international presence.

Global stocks eased as investors reduced their risk exposure ahead of the Federal Reserve’s Jackson Hole symposium on Friday and what central bank Chair Jerome Powell might say about U.S. tapering monetary stimulus.

If Powell maintains the line that policymakers recently looking to taper this year, then I think the markets could be in for a bit of a nasty surprise and I think that’s seems to be what they’re kind of positioning for, Erlam added.

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