FTSE 100 breaks rally
FTSE 100 ends winning streak
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By inthenews. |  |
Tuesday, 28, Jul 2009 05:39
A slump in mining stocks sent the FTSE 100 1.25 per cent lower to 4,528.84, ending an 11-day winning strealk.
After reaching a six-month high of 4615.92 earlier in the day, the UK's leading shares index slumped, breaking the record 11-day rally.
Miner Randgold Resources led the falls, posting an 8.65 per cent drop, following mixed second quarter results.
Eurasian Natural Resources and Kazakhmys were trading 6.85 per cent and 6.709 per cent lower, respectively.
David Jones, chief market strategist, IG Index, said: "Quarterly numbers from BP have dampened optimism a bit today.
"Profits were down as expected, but the company also said that it wasn't seeing much of an increase in the demand for crude oil, which does tend to suggest that global industry is still in something of a subdued state."
Going into afternoon trading, markets in the US were also subdued. The Dow Jones fell by 0.71 per cent, while the S&P 500 dipped 1.05 per cent.
"Sentiment – while not as runaway bullish as we have seen recently - is still positive though, with traders expecting the 4500 mark on the FTSE to act as both a psychological barrier – this time on the way down – and as a trigger to bring fresh buyers in," Mr Jones added.
Jeff Hochman, director of technical analysis at Fidelity International, said investors should expected a few market gyrations in the short term, but these should be seen as a buying opportunity.
"Markets always have to climb this wall of worry and the fear of being left behind will become increasingly strong," he said.
"The alternative scenario is that markets stay fairly flat, within a trading range, before trending higher as each piece of new data adds weight to the evolving recovery story," he added.