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Shares fall on commodity sell-off | Shares fall on commodity sell-off |
(40 minutes later) | |
Europe and Asian stock markets fell as investors cashed in profits from record high commodity prices, causing mining and oil shares to tumble. | |
Oil prices dropped below $100 for the first time in two weeks, gold sank to a one-month low and copper fell too. | Oil prices dropped below $100 for the first time in two weeks, gold sank to a one-month low and copper fell too. |
Traders fear that an economic slowdown in the US will lead to a fall in global demand for raw materials. | |
In Europe, the UK's FTSE 100 fell 0.5%, while in Asia there were bigger losses, with Hong Kong ending down 3.5%. | |
The price of gold fell 3% to $912.85 an ounce after hitting a record high of more than $1,000 an ounce earlier this month. | |
"Anyone who bought gold has been rewarded with a very healthy return," Ross Norman, managing director of TheBullionDesk.com said. | |
"There's a temptation to take profit, people have done so and it's quite healthy," he said. | |
Commodities hit | |
Figures released in the US on Wednesday by the Energy Information Administration showed demand for petrol fell 3.2% in the last four weeks. | |
The trouble is that sentiment is appalling, and while sentiment is bad, it is very difficult to do anything about it. David Buik, Cantor Index Check latest share and commodity prices | |
This depressed oil prices, with a barrel of Brent crude down $1.21 to $99.51. | |
"The US is still the biggest contributor to global growth, so any slowdown will have implications for commodity prices," Jason Teh at Investors Mutual in Sydney said. | "The US is still the biggest contributor to global growth, so any slowdown will have implications for commodity prices," Jason Teh at Investors Mutual in Sydney said. |
Shares in mining companies were down sharply. Vedanta Resources, which produces aluminium and copper, was the hardest hit, down more than 7% at 1,863 pence. | |
Market nerves | |
Uncertainty remained amongst traders and investors, with some hoping a meeting between the Bank of England and a number of banks about financial stability would improve confidence in the market ahead of the Easter break. | |
"The market is very nervous," said David Buik of Cantor Index. | |
"The stock market is cheap, but the trouble is that sentiment is appalling, and while sentiment is bad, it is very difficult to do anything about it." |