Sector movers: Commodities and industrials weigh as trade fears remain
Industrial metals & mining, industrial engineering and oil services sectors were all swathed in red on Wednesday, while telecoms stocks were generally ringing up gains.
The wider commodities sector was having a tough time of it amid low metals prices, with copper in particular slumping 2%.
Mike van Dulken, head of research at Accendo Markets, said trade war concerns remain front and centre for commodities and equities markets, given the potential global impact.
China's planned launch of tariffs on $34bn of US goods and Washington's $50bn tariff bazooka on Chinese imports both land on the same day.
The European Union in meanwhile planning to push for multilateral talks over cutting automotive tariffs, the Financial Times reported, a fairly explicit appeal to President Trump to ease off on his trade crusade, which could be offered at a summit next weekend in Beijing if the EU takes up China's offer of a place at the negotiating table.
"Metals prices were caught up in the general market sell-off following the ramping up of tensions between the US and China in June," said commodities economist Simona Gambarini at Capital Economics. "Signs of softer economic growth in China also contributed to the negative investor sentiment towards metals.
"We expect prices to continue trending lower over the coming months even if fears of a trade war fade," she said, seeing rising output and subdued demand ensuring steel and iron ore prices fall over the coming months.
Among the telecoms stocks on the rise, TalkTalk was lifted as investors speculated about the potential results of stake-building in the broadband provider. Hedge fund Toscafund Asset Management upped its stake in the company to 16.2% from 15.1%, just days after TalkTalk founder Charles Dunstone splashed out around £750,000 to boost his stake towards 29%.
BT Group shares continued their positive momentum since the announcement about chief executive Gavin Patterson's departure, with the stock steadily rising around 8% since.
Top performing sectors so far today
Fixed Line Telecommunications +2.75%
Mobile Telecommunications +1.03%
Electricity +0.94%
Tobacco +0.63%
Industrial Transportation +0.52%
Bottom performing sectors so far today
Industrial Metals & Mining -2.82%
Forestry & Paper -1.57%
Industrial Engineering -1.57%
Electronic & Electrical Equipment -1.34%
Mining -1.26%