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FTSE slips on Brexit caution, with Anglo American leading miners lower

Discussion in 'Market News' started by Lily, Jun 21, 2016.

  1. Lily

    Lily Forum Member

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    Anglo drops after disappointing update from platinum business

    After Monday’s surge in shares and sterling as the spectre of Brexit seemed to recede, there is a more cautious mood in the City.

    Mining shares are heading lower as commodity prices ease again on concerns about the state of the global economy. Testimony later from US Federal Reserve chair Janet Yellen will see her give an update on the central bank’s view on the outlook, while European Central Bank president Mario Draghi is also due to speak.

    This week’s early enthusiasm in the UK markets appears to have eased this morning. The FTSE 100 is paring gains after having surpassed the 50, 100, 200-day moving averages on hopes that the UK would vote to remain in the EU. Although the latest Brexit polls were in favour of the ‘Remain camp’, not much has changed fundamentally regarding the Brexit probabilities. At this stage, the market remains heavily hedged against the Brexit risks, while pricing in a ‘no exit’ as the base case scenario.

    The FTSE stocks are fragile at the open as a reminder that investors may have gone well beyond themselves just a couple of days before the Brexit referendum.

    The company continues to suffer short term headwinds, while the longer term outlook remains brighter given a range of opportunities across the businesses. 150p target price maintained following a peer group re-rating.

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