Industrial giants tumble in London as commodities boom runs out of steam

Sharp falls among industrial giants led to a mixed day for London’s top indexes today.

The capital’s premier FTSE 100 index edged 0.02 per cent lower to 7,627.95 points, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, jumped 0.36 per cent to 21,159.68 points.

Growing expectation that the commodity price boom since the reopening of the global economy from the worst Covid-19 restrictions is starting to run out of steam weighed on market sentiment toward London’s biggest miners.

Anglo American, Antofagasta and Glencore all nursed heavy losses of at least 5.6 per cent on the FTSE 100.

Analysts pointed to demand for the likes of copper, nickel and zinc all receding in response to eye wateringly high prices, which will squeeze miners’ revenues.

Soaring costs caused by a combination of supply chain disruption, a labour squeeze and higher interest rates will also eat in miners’ margins.

The City was also eyeing a slate of closely watched central banker speak today, with the chiefs of the US Federal Reserve, European Central Bank (ECB) and the Bank of England all delivering remarks.

Fed Chair Jerome Powell and ECB president Christine Lagarde appeared together, while Bank governor Andrew Bailey discussed macro economic policy in a discussion for the Peterson Institute.

Yields on US and UK government debt have steepened sharply over the last few weeks as a result of traders betting on the country’s respective central banks pushing ahead with a rapid tightening of monetary policy to tame historic high inflation.