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FTSE 100 drops on miners, energy stocks

written by Bella Palmer
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The blue-chip FTSE 100 dropped 0.1 per cent, but the FTSE 250 midcap index gained 0.2 per cent

UK's FTSE 100 slid on Monday, as losses in heavyweight energy and mining stocks chipped away on the commodities-heavy index, while cautious investors prepared for a string of economic data throughout this week.

The blue-chip FTSE 100 dropped 0.1 per cent, but the more domestically-focussed FTSE 250 midcap index gained 0.2 per cent.

Heavyweight energy stocks dropped 1.0 per cent, tracking a decline in crude oil prices and industrial metal miners shed 0.4 per cent.

What we have seen before the Thanksgiving weekend is a market which is now pricing in this narrative that we won't see any more rate hikes and instead we will start to see rate cuts as soon as May of next year, and that led to a lot of risk on sentiment, said Axel Rudolph, senior market analyst at IG Group.

Rudolph added: Usually after Thanksgiving, you tend to get some profit taking because the volumes were low, etc.

The FTSE 100 is on track for monthly gains as sentiment got a lift by hopes of a softer monetary policy globally heading into 2024, with expectations growing that perhaps interest rates have reached a peak.

Investors are now awaiting the UK mortgage data and the inflation data across the eurozone and in the US due later in the week.

Bucking the trend, precious metal miners gained 1.6 per cent as prices of most precious metals rose, with gold prices reaching a six-month high.

In the meantime, Bank of England Governor Andrew Bailey said getting inflation down to the central bank's 2 per cent target would be "hard work", as most of its recent decline was because of the unwinding of the surge in energy costs last year.

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