Precious metals miners were at the bottom of the pile on Thursday as the greenback caught a bid in the wake of the latest European Central Bank policy announcement and ahead of a potentially market-moving US consumer price report due out the next day.
Traders appeared to be a bit non-plussed despite the more hawkish than expected policy bias of the ECB’s governing council which signalled a 25 basis point interest rate hike for the July meeting, another possibly larger hike in September and gradual but sustained hikes thereafter.
“Beyond September, based on its current assessment, the Governing Council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate,” the ECB said in its policy statement.
Worth noting, there was a fair amount of market chatter regarding potential fragmentation risks in the euro area as the ECB tightened policy.
Indeed, just hours before the ECB announced its decision, former ECB boss and now Italian Prime Minister, Mario Draghi, had appeared to caution against hasty rate rises, pointing to current levels of unemployment and the outsized role of energy quotes as indicative of there still being slack in the economy.
Benchmark 10-year Italian government bond yields jumped by 24 basis points to 3.61%.
Against that backdrop, roughly an hour after the close of London markets the US dollar index was trading up by 0.55% to 103.11 and near its session highs and exerting a drag on precious metals’ prices.
The Personal Goods space was next among the worst performing stocks, paced by losses in the likes of Burberry Group, THG Group and Watches of Switzerland Group.
Going the other way, gains for Mediclinic boosted the Medical Equipment space after the private hospital operator rejected a 463p a share takeover offer from a consortium comprising of shareholder Remgro and MSC Mediterranean Shipping Company.
Vodafone did the same for Telecommunications stocks.
Top performing sectors so far today
Medical Equipment and Services 9,945.50 +3.02%
Telecommunications Service Providers 3,153.70 +0.90%
Beverages 27,419.25 +0.02%
Investment Banking and Brokerage Services 11,548.22 +0.01%
Alternative Energy 0.00 0.00%
Bottom performing sectors so far today
Precious Metals and Mining 10,333.87 -3.46%
Personal Goods 28,413.95 -3.05%
Leisure Goods 17,396.86 -2.45%
Pharmaceuticals & Biotechnology 20,529.33 -2.45%
Chemicals 12,028.73 -2.24%
