Mining stocks dragged the FTSE 100 lower on Wednesday after China reported its weakest growth in three years, reviving worries about metals demand. Fresnillo led the fallers as gold and silver retreated from the previous day's gains.
Weaker-than-expected Chinese growth sent mining shares sliding on Wednesday, raising fresh concerns about demand from the world's biggest consumer of industrial metals. Investors sold mining shares as the data revived concern about demand from the world's biggest consumer of industrial metals.
The trigger was the growth print itself. China's economy grew 4.3% in the second quarter, down from 5.0% in the first three months of the year and its weakest pace of expansion in three years. That reading prompted investors to lighten exposure to the miners most tied to Chinese demand.
Precious metals give back gains
Precious metals also unwound part of the previous day's advance as risk appetite improved and rate expectations eased following softer US inflation. The shift in sentiment weighed on producers that had rallied a session earlier.
Fresnillo PLC led the declines, falling more than 3%, while gold miners Hochschild Mining and Endeavour Mining were also among the biggest fallers in the FTSE 350 resources sector. Copper miner Antofagasta lost more than 2%, while Anglo American and Rio Tinto also traded lower.
Metals prices retreat
The selling came despite relatively stable copper prices. Gold slipped 0.8% to US$4,021.44 an ounce, while silver fell 0.9% to US$58.13 an ounce.
Copper itself was little changed, but investors focused on what slower Chinese growth means for future demand. China accounts for more than half of global refined copper consumption and is a major buyer of iron ore and other industrial metals, which keeps its economic performance a key driver of mining shares.
Source: Proactive
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