Shares in Polymetal International, BHP Billiton and Fresnillo are very much in favour as investors bet on a pivotal time for Chinese and global growth. Weakness in this sector was the key reason for the FTSE 100's relative underperformance last year. The UK benchmark index now looks set to challenge the 22 May highs, and is finally starting to catch up with its European counterparts.
News that Morgan Stanley favours United Utilities over industry peers has buoyed investor interest today, too. The share price had been sinking since the beginning of the year, but has now established two-month highs, adding 4% this morning.
Strong fashion sales for Primark over Christmas have helped to neutralise a weak performance in the sugar unit of Associated British Foods. Pressure from the falling commodity price and the weaker Australian dollar is expected to hit revenue this year. The share price had gained 30% over the past month, so some healthy profit-taking on the back of the numbers has seen it decline 3% today, sending it to the bottom of the blue-chip index.
On the macro front, inflation data is taking centre stage today. The eurozone still appears to be mired in a state of deflationary concern and, while investor sentiment towards the bloc has improved, the climate is not beneficial to the more debt-laden constituents. We can doubtless expect to see a myriad of denials that there are any real problems on the newswires in the aftermath of the release. The year-on-year figure is expected to come in at 0.8% - well below the 2% target mandated by the ECB.
European car sales marked their sixth year of decline. Overall, the EU market recorded a total of 11,850,905 new cars, or 1.7% less than in 2012. The effect on the automaker equities has been mixed. Renault shares have gained, while Peugeot has been subjected to selling.
Weekly unemployment claims for the US are also due out this afternoon. These are expected to tick down slightly to 327,000. Plans unveiled by JC Penney last night to cut 2000 jobs and close 33 stores will not be felt until later this quarter.
The Dow Jones, having gained 108 points yesterday, has settled back in futures trading and is expected open 30 points lower at 16,451.