Miners after the bounce: "consolidation is natural"
STOXX 600 down 1.5%
Volatility rises
China GDP tops forecasts
Wall St futures inch lower
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MINERS AFTER THE BOUNCE: "CONSOLIDATION IS NATURAL"
Big mining stocks are heading south on Tuesday with jittery traders making their sectoral gauge .SXPP the biggest loser among STOXX 600 sub-indices, down almost 3%.
The fall follows a sharp move to the upside in recent weeks and for Barclays, some profit taking is just "natural". Yet, looking ahead, the British bank expects the industry to benefit from improving macro conditions filtering through metal markets.
"The commodity price rally so far has been largely driven by investors seeking inflation hedges as central banks are still seen cutting rates by our strategists. Physical market indicators have yet to come to the party, but we expect them to do so, now that PMIs are moving into expansion territory in the U.S. and China," Barclays analyst Amos Fletcher writes.
"However, with a sharp rally now in the rear-view mirror some consolidation is natural," he adds.
The STOXX 600 Basic Resources index .SXPP was last down 2.9%, set for its biggest one-day drop since late October. Steelmakers Arcelormittal MT.AS and Voestalpine VOES.VI are both down around 6%, while diversified miners Anglo American AAL.L and Rio Tinto RIO.L down 2.8-3.5%. The wider European market .STOXX is down 1.5%.
(Danilo Masoni)
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FOR TUESDAY'S OTHER LIVE MARKETS POSTS
'SLEEPING BEAUTY' HAS WOKEN UP - VOLATILITY IS BACK CLICK HERE
TIME FOR A PAUSE IN THE 'GOLDILOCKS' RALLY CLICK HERE
STOXX HEADS FOR BIGGEST DAILY DROP IN NINE MONTHS CLICK HERE
EUROPEAN FUTURES SIGNAL SHARP DROPS CLICK HERE
MARKET MOOD STAYS SOMBRE CLICK HERE
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