𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The FTSE 100 has made steady progress despite a plunge in the gold price which saw heavy share price drops for Fresnillo and Endeavour Mining.

The FTSE 100 index closed up 23.42 points, 0.3%, at 9,426.99.

The FTSE 250 ended 39.82 points higher, 0.2%, at 21,908.30 but the AIM All-Share shed 5.20 points, 0.7%, at 765.86.

Gold went into reverse with the precious metal trading at 4,131.30 US dollars (£3,078) an ounce on Tuesday, down 4.9% from 4,345.43 dollars (£3,237) on Monday. The price of silver fared even worse, tumbling 6.8%.

Kathleen Brooks, research director at XTB, said: “The reversal has been abrupt, there was no single event that has caused today’s sell-off – instead, it is most likely caused by a confluence of factors including stretched valuations and signs that US CPI, which will be released at the end of this week, could come in softer than expected.”

But Ms Brooks pointed out the gold price has still not surpassed Monday’s low and said a shake-out in an asset market is the sign of “healthy price action”.

“It suggests that investors won’t get too far ahead of themselves, and there is a limit to upside exuberance,” she added.

The chunky falls were reflected on the FTSE 100, where gold miner Endeavour Mining fell 9.7%, while gold and silver miner Fresnillo slid 12%.

On the FTSE 250, gold and silver miner Hochschild Mining shed 14%.

Joseph Dahrieh, managing principal at Tickmill, said signs that the US government shutdown could be resolved this week could add to the selling pressure.

White House officials suggested negotiations were progressing, easing some investor anxiety and reducing demand for defensive positioning, he noted.

Elsewhere, data from the Office for National Statistics showed UK public sector borrowing, excluding banks, rose to £20.2 billion in September, up £1.6 billion, or 8.6%, from a year earlier – the highest September figure in five years.

The figure came in just above the Office for Budget Responsibility’s forecast of £20.1 billion, but slightly below the FXStreet-cited consensus of £20.5 billion.

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, forecast borrowing will hit £126.9 billion for fiscal 2025 to 2026 as a whole, ending well above the OBR’s March forecast of 117.7 billion.

“The material overshoot… provides a difficult backdrop to the Budget,” he added.

“All told, we expect the OBR to say the Chancellor’s £9.9 billion of fiscal headroom has turned into a £15 billion hole. We think the Chancellor will fill that hole, and aim for a wider £20 billion margin of headroom, in the budget by raising stealth, sin, pensions and property taxes as well as targeting spending cuts,” he said.

The pound was quoted lower at 1.3390 US dollars at the time of the London equity market close on Tuesday, compared to 1.3424 dollars on Monday.

The euro stood at 1.1612 dollars, lower compared to 1.1662 dollars. Against the yen, the dollar was trading at 151.74 yen, higher compared to 150.52 yen.

In European equities on Tuesday, the CAC 40 in Paris ended 0.6% higher, while the DAX 40 in Frankfurt rose 0.3%.

Stocks in New York were mixed at the time of the London close. The Dow Jones Industrial Average was up 0.7%, the S&P 500 was 0.1% higher, while the Nasdaq Composite declined 0.2%.

The yield on the US 10-year Treasury was quoted at 3.96%, narrowed from 4.00% on Monday. The yield on the US 30-year Treasury stood at 4.54%, down from 4.59% on Monday.

On Wall Street, General Motors hit top gear after raising full-year guidance and stating the hit from Donald Trump’s tariffs will be lower than feared.

Shares in the Detroit-based car maker accelerated 15% after what chief executive Mary Barra called a “very good quarter of earnings and free cash flow”.

“The overall impression is of a company firing on all cylinders within the context of those factors that management can control, and with improving visibility with regard to those factors outside management’s control,” said JPMorgan analyst Ryan Brinkman.

Meanwhile, Warner Bros Discovery shares jumped 11% after the company started a review of “strategic alternatives to maximise shareholder value” and said it would consider a sale.

The California-based media and entertainment company said it has started the review in light of “unsolicited interest” it has received from “multiple parties” both for the entire company and Warner Bros alone.

Last month, a report from the Wall Street Journal said recently merged Paramount Skydance was preparing a takeover bid for Warner Bros Discovery.

On the FTSE 100, Segro rose 2.9% as the London-based property developer said £22 million of new headline rent was signed in the third quarter, up 47% from £15 million a year ago.

Chief executive David Sleath said the group is seeing “momentum building” across its development programme and highlighted “a significant value creation opportunity” in its growing data centre pipeline.

Coca-Cola HBC ended down 0.9% after announcing the acquisition of a 75% shareholding in Coca-Cola Beverages Africa from Coca-Cola and Gutsche Family Investments for 2.6 billion dollars.

The deal creates the second-largest Coca-Cola bottling partner by volume globally, with leading market positions across Africa and Europe.

The Zug, Switzerland-based soft drinks bottler said the agreement unlocks opportunities for growth and is expected to be low-single digit accretive to earnings per share from the first full year following completion.

The reaction “betrays some nervousness on the part of the market”, explained Russ Mould, investment director at AJ Bell.

“Coca-Cola HBC already has experience in Africa, having built a presence in Egypt and having enjoyed a longstanding footprint in Nigeria. However, there will still be risks involved in operating more widely across the continent, and Coca-Cola HBC will hope these are justified by the growth opportunities on offer,” he added.

Brent oil traded at 61.26 dollars a barrel, up from 60.69 dollars late on Monday.

The biggest risers on the FTSE 100 were Melrose Industries, up 32.00 pence at 634.00p, JD Sports Fashion, up 2.86p at 98.34p, Segro, up 19.20p at 691.80p, Whitbread, up 84.00p at 3,057.00p and WPP, up 8.60p at 356.20p.

The biggest fallers on the FTSE 100 were Fresnillo, down 294.00p at 2,114.00p, Endeavour Mining, down 330.00p at 3,068.00p, Entain, down 25.80p at 786.20p, Anglo American, down 69.00p at 2,826.00p and Antofagasta, down 61.00p at 2,636.00p.

Wednesday’s global economic diary sees UK inflation data and Japanese trade figures.

The UK corporate calendar has third quarter results from lender Barclays, gold and silver miner Fresnillo, and consumer goods firm Reckitt Benckiser.

– Contributed by Alliance News.