FTSE 100 miners retreat as Strait of Hormuz optimism fades, precious metals cool and copper faces headwinds from China and the dollar.
Fresnillo, Antofagasta and Endeavour Mining are among the day's heaviest fallers on the FTSE, down 4%, 2.3% and 1.9% respectively, as the euphoria that swept through mining stocks last Wednesday rapidly unwinds.
All three surged on 8 April after a US-Iran ceasefire announcement raised hopes that the Strait of Hormuz, the critical shipping lane through which a large share of global oil flows, would reopen, sending metals prices sharply higher and oil lower.
Antofagasta PLC (LSE:ANTO) leapt 12.6% that day, Fresnillo PLC (LSE:FRES) surged around 10% and Endeavour gained 5.7%, one of the biggest single-session runs for FTSE miners this year.
That trade is now reversing, with the Strait situation murkier than initially hoped: Washington has issued warnings to US-flagged vessels travelling through the waterway even as nuclear talks with Iran continue, leaving markets hedging a bet they had already priced as won.
Precious metals have endured sharp swings since late January peaks, with profit-taking and overheated positioning driving prices back from recent highs.
Uncertainty over US monetary policy is compounding the pressure, with speculation over a potential leadership change at the Federal Reserve adding to volatility in non-yielding assets like gold and silver, where any hint of a hawkish hold can quickly reverse gains.
Fresnillo faces a double headwind as the world's largest silver producer and one of Mexico's leading gold miners, meaning weakness in either metal hits simultaneously.
For Antofagasta, the issue is copper, which trades on global growth expectations and has been weighed down by a stronger dollar, softening manufacturing activity and a slower-than-expected recovery in China, where analysts say further policy stimulus is needed before sentiment on copper miners meaningfully improves.