Federal Reserve related nerves kept markets in check today, with many, including the UK’s main index, reversing early session gains.
Stocks initially looked past weak August retail sales and industrial production data from China over the weekend as it was still better than the previous month.
After lunch, investors were not willing to carry much risk into the American session.
Connor Campbell at Spreadex said this was “understandable, adding, “there was no real news to work with this afternoon, nothing to de-fog the market-confusing mist surrounding the Fed’s current position in regards to a September rate-hike.”
The switch in sentiment from morning to afternoon was best reflected in UK-listed mining stocks as commodity companies crippled the FTSE 100.
David Madden at IG said: “Mining and energy companies are keeping the FTSE 100 under the cosh, and given the deceleration of the mineral-hungry economies, it is a theme that will be around for a while.”
Once up over half a per cent, the footsie turned the other way after lunch and ended more than 0.5% lower, 33 points, to 6,084.
Sat at the bottom of the index was Glencore (LON:GLEN), which has decided to suspend copper and cobalt mining at its Katanga mine in the Democratic Republic of Congo for at least 18 months. Shares dropped 4.4% to 128p.
Fellow miners Lonmin (LON:LMI) and Kaz Minerals (LON:KAZ) were also hit, falling 6% to 21p and 5.6% to 152p respectively.
Madden said: “The collapse in commodity markets has the macro-economic environment looking dreary, and investors can’t help but feel cagey.”
Elsewhere, banks were among the losers, seemingly following the appointment of a hard left politician John McDonnell as the new Shadow Chancellor by Jeremy Corbyn, Labour’s new leader.
Jasper Lawler at CMC Markets said: “Clearly The Labour Party are not in power but the small majority of The Conservative Party means there will be occasions where the party’s new extreme left leader can influence policy.”
Barclays (LON:BARC) dipped 1.4% to 2545p, Lloyds (LON:LLOY) 1% to 75p.
Conversely, drugs giant AstraZeneca (LON:AZN) was higher as got a shot in arm from broker heavyweight Deutsche Bank.
The broker upgraded the shares to 'buy' from 'hold' sending them 34p up to 4,320p.
In small cap news, Gem Diamonds (LON:GEMD) sold the second ‘exceptional’ white diamond recovered from the Letšeng project this year. Shares nudged 2p higher to 127p.
Elsewhere, Active energy (LON:AEG) announced it is teaming up with a US firm to commercialise what it describes a “revolutionary” new manufacturing process that allows biomass to be burned in unconverted coal-fired power stations. Shares gained 4.5% to 5.75p.
One of the biggest gainers was Motive Television (LON:MTV), which shot up as the app maker said it is to make its TabletTV available on the new AppleTV platform.
Motive will become one of the earliest developers for the Apple TV platform and shares leapt 14% to 0.23p.
Conversely, HaiKe Chemical Group (LON:HAIK) was a big loser as it said first half was as expected but due to the slowdown in China over recent months, the firm is unlikely to make a profit for the full-year. Shares dropped 34% to 8.5 p.