A bounce back in the FTSE 100 this morning, following yesterday’s historic decline, has been led by the major mining firms.
BHP (BHP) has been the biggest riser of the major diversified miners so far, up 10.4% to £10.37, followed by Sirius Minerals buyer Anglo American (AAL) jumping 9% to £13.46, and Rio Tinto (RIO) rising 8.8% to £32.28.
Swiss miner Glencore (GLEN) was also on the up, increasing 8.6% to 138p. Steelmaker and mining company Evraz (EVR) rose 11.3% to 226p.
GLOBAL GROWTH GAUGE
The FTSE 100’s moves can often be led by the big diversified miners (i.e. those which dig different metals or other commodities out of the ground), and movements in their share prices can reflect how optimistic or pessimistic investors might be feeling.
In normal times, their share price fluctuations can be a useful proxy on global growth expectations.
Among the more pure play miners, like Chilean copper producer Antofagasta (ANTO), a higher degree of caution can be seen in its 5% rise to 642p.
It’s a different story however for Kazakh copper miner KAZ Minerals (KAZ) in the FTSE 250, which has soared 12.5% to 302p.
Copper is considered the best bellwether for the global economy because it has such a wide range of uses, which makes it price particularly most sensitive to macroeconomic ebbs and flows.
GOLD FLAT DESPITE MARKET TURMOIL
Another interesting development has been the gold price. Seen as one of the ultimate safe haven assets, gold would usually be expected to rise when stock markets tumble.
However, its price has been muted as central banks around the world pledge support to prop up ailing economies.
The gold price is almost flat today at $1,587 per ounce, following a decision by the US Federal Reserve yesterday to pump up to $1.5tn into the financial system to mitigate the impact from the coronavirus outbreak.
The lack of reaction from gold helps explain why Mexican silver and gold miner Fresnillo (FRES) is up only 1% today to 561p, while Russian gold miner Polymetal International (POLY) is up 2.3% to £12.17.
In the FTSE 250, Egyptian gold miner Centamin (CEY) is up only 0.6% to 113p, while Peruvian gold and silver miner Hochschild Mining (HOC) is actually down 0.7% to 134p.
