Miners lift UK stocks as metals hit record highs
Gold, silver and copper rallied to fresh peaks, driving FTSE 100 miners higher while US markets digested the Fed's latest rate decision.
Miners dominate FTSE 100 as precious metals surge
United Kingdom (UK) and European stocks climbed in early trading as heavyweight miners capitalised on record-breaking moves in precious and base metals. The FTSE 100 pushed higher, led by Rio Tinto, Glencore and Anglo American, which added the most points to the index.
Gold, silver and copper all hit fresh highs. Antofagasta, Fresnillo and Endeavour also featured among the top gainers as commodities continued to rally.
The STOXX 600 basic resources sector has risen about 19% this year and nearly 50% over the past 12 months. This performance places it well ahead of the broader European market.
Banks and energy stocks advanced alongside miners. Healthcare, utilities and food stocks underperformed as investors moved into cyclical sectors.
Sterling gains ground as dollar weakens
The British pound (GBP) rose above $1.38 as the United States (US) dollar remained under pressure following the Federal Reserve's (Fed) latest policy decision. Sterling's strength provided additional support for UK equities, particularly large-cap stocks with international earnings exposure.
The dollar has declined in recent sessions despite official attempts to support the currency. The forex market continues to see selling pressure across multiple currency pairs.
GBP/USD broke above $1.38, marking a significant technical level. The pair has now reversed most of its recent losses from earlier in the month.
Commodity-linked currencies also benefited from the dollar's decline, with the Australian dollar and Canadian dollar gaining ground. This dynamic supported resource stocks on a global basis.
Stock-specific moves provide sharp swings
Individual stock moves offered significant volatility. 3i jumped about 15% after releasing strong results driven by its Action retail investment.
Wizz Air surged close to 10% following a guidance upgrade. The airline cited easing fuel costs and resilient demand for the improved outlook.
Ocado fell nearly 9% after announcing the closure of a Canadian distribution site. The grocery technology group cited operational challenges at the facility.
Fed holds rates at current levels
US equities barely moved following the Fed's decision to hold rates at 3.5% to 3.75%. The Nasdaq 100 edged up 0.17%, the S&P 500 was flat and the Dow Jones rose 0.02%.
The Fed chairman stated that inflation remains elevated but noted that labour market risks have eased. The statement reinforced market expectations that the first rate cut is most likely to arrive in June rather than April.
Markets had already priced in this timeline. Futures markets continue to show June as the most likely timing for the first rate reduction.
The Fed stated it will continue monitoring economic data between now and the next policy meeting. Inflation readings and employment figures will remain the key inputs for future decisions.
Tech stocks lead Wall Street gains amid chip rally
Technology and semiconductor stocks provided the main source of strength on Wall Street. NVIDIA rose 1.6%, Micron jumped 6% and Intel surged 11%, helped by strong results from SK Hynix and record orders at ASML.
The global semiconductor sector has risen since the start of the year. Demand for artificial intelligence (AI)-related chips and improving supply chain conditions have driven the gains.
After-hours trading saw mixed reactions from major tech stocks. Meta gained about 4% and Tesla rose 3%, while Microsoft fell more than 3% following its results.
The moves followed quarterly earnings reports from the companies. Microsoft's decline came as investors assessed the company's capital expenditure on AI infrastructure.
Earnings season delivers sharp reactions
Quarterly earnings reports produced significant moves in both directions. Texas Instruments climbed nearly 10% and Seagate surged more than 19% after both companies issued upbeat forecasts.
Textron slid almost 8% on weaker guidance. The aerospace and defence company cited softer demand in certain business segments.
Asian tech stocks extended January's rally overnight. Gold rose another 2.7% to fresh highs and oil pushed to four-month peaks.
The dollar stayed under pressure across major currency pairs. Official support measures have not yet reversed the recent decline in the greenback.
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