FTSE opens with a flourish but is undermined by Gold
The FTSE 100 opened today and instantly set course for its best levels since September 2000, when it peaked at 6752. The index reached a five and a half year peak of 6735.43 but retreated by the mid day break to 6724.49 — little changed from it’s opening levels of 7723.06.
At the time of writing the index had declined further to 6709.80, primarily due to miners suffering with the price of gold, which continues to plummet. Despite the decline, morale is still high in London as the markets opened up from their closing levels on Friday. The FTSE 100 closed out the week at 6687.80, so is effectively still up 22.00. That could all change however, as the index is still falling at an alarming rate. Some analysts will say this could also be the trigger that investors have been expecting, leading to a pullback on the recent rally that the markets have enjoyed.
Budget airline EasyJet lead the way, climbing to 1235p per share, a rise of 47.00, or 3.96 percent, early afternoon trading. They were followed by Petrofac Ltd and Royal Bank of Scotland Group PLC, who both made advances of 2.49 percent. United Utilities Group PLC and National Grid PLC also saw healthy gains of 2.03 percent and 1.2 percent respectively.
The food industry was perhaps the day’s biggest surprise package, lead by Rexam PLC, who advanced by 1.53 percent on the back of better than expected profits for 2012 of £418m. The nation’s biggest food packaging company were originally expected to post profits of £377m. Associated British Foods PLC also climbed by 1.48 percent.
On the negative end of things were miners. Four of the days six biggest losers by early afternoon trading were in the mining industry. Polymetal International PLC had fallen by 4.26 percent, leading the FTSE in declines, while Fresnillo PLC fell by 2.71 percent. Eurasian Natural Resources Corp PLC and Anglo American PLC also fell by 2.65 percent and 1.85 percent respectively.
The miners plummeted after Gold prices continued to fall, with the precious metal now in its longest slump for more than four years. With surges in markets around the world investors have been removing their wealth from Gold which has been considered a safe haven as it usually moves inversely with the markets. Golds only real chance is if demand from consumers increases but that’s unlikely with so much uncertainty still lingering in the air due to the economic climate. Until something gives, the miners will have to live with being the whipping boys of the markets after spending the better part of a decade as their most frequent saving grace.