A sluggish start to the new year

Heading into the close, the FTSE 100 is down 20 points and looks set to end the day around the 6730 level.

European markets unable to gain ground

Equities have started 2014 on the wrong foot after an excellent performance in 2013. The City of London is not at full capacity just yet, and the holiday feeling is still lingering with trading volumes and volatility low. The City should be firing on all cylinders next week.

The slip in Chinese manufacturing has dragged the mining sector into the red. A slide in business activity combined with doubtful credit conditions has called China’s demand for minerals into question. Soaring manufacturing levels and sliding bond yields weren’t enough to save European equities from losing ground.

US hit by profit-taking

In the US, the Dow Jones is down 110 points at 16,466 as profit-taking from the December rally sets in. Traders are settling up their books because January will be a busy month: the Fed will at last begin tapering its stimulus package, and the reporting season kicks off in a few weeks.

Mixed fortunes for metals

Copper has been hit by the weaker-than-expected Chinese manufacturing figures. However, gold and silver have turned over a new leaf after both metals had a terrible 2013.

Dollar strengthens

The US dollar has gained ground versus most major currencies after the greenback posted its largest annual loss in five years in 2013.

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