Spreadex Market Update
Mining sector strike gold as commodity gains lift markets, but IMF troubled by global economic landscape
The Washington-based institution pointed to legacy-issues leftover over from the last financial crisis, the precarious nature of China’s economy and a lack of sufficient preparedness for an impending US rate hike as just some of the threats to the global recovery.
Yet investors continued to ignore the falling figures and economic warnings that have been so prevalent in the past few weeks, with the Dow climbing around a percent to leave it achingly close to the 17000 mark it abandoned in the aftermath of Black Monday. The Eurozone, meanwhile, saw the DAX cross 10000 for the first time since the end of September as the German index hit a VW-inspired 130 point increase.
Despite a NIESR GDP estimate suggesting 0.5% third quarter growth for the UK, a comedown from Q2’s 0.7%, the FTSE climbed to a near 7-week high this Wednesday, as its mining stocks struck gold for the 7th day in a row to see their best run since December 2013. Lonmin was up 32%, whilst Glencore jumped 10% to £1.30 for the first time in 2 and a half weeks; Rio Tinto, Anglo American and Antofagasta, meanwhile, were all up between 9% and 12%. Not to be left out, the oil sector saw big gains as Brent Crude approached $53 per dollar, with BP and Shell hitting 2 month and 6 week highs respectively.
Looking to tomorrow and after all the hoopla surrounding the MPC interest rate vote a couple of months ago, Thursday’s Bank of England economic breakdown is unlikely to contain too many surprises, with most expecting Ian McCafferty to remain the sole hawk on the committee.
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