While the rest of the markets opened flat, the FTSE took a drubbing after the bell, hammered by its mining stocks.
Though copper’s losses have stalled after 2 days of decline, the UK index’s weighty miners are still deep in the red. Rio Tinto (LON:RIO) and BHP Group PLC (LON:BHPB) were the worst hit, falling 3.2% and 2.9% respectively.
This in turn sent the FTSE itself 0.6% lower, leaving the index teetering on the precipice of 6,700.
In contrast, its Eurozone peers weren’t up to much. The DAX, patting a full belly of gains after closing at a fresh all-time high last night, deservedly slept through its alarm, while the CAC pushed towards 5,950 as it rose 0.2%.
That sluggishness is currently set to extend to the US open, where the Dow Jones, after losing steam by the end of Tuesday’s trading, is heading for a 0.1% increase when the bell rings on Wall Street.
There is one rather large obstacle between then and now, however: the inflation reading for February.
It is far too early for the figure to reflect the inflationary pressures of a re-opening, rebounding economy, the kind investors have fretted over in recent weeks. For one thing, Biden’s American Rescue Plan still needs to be confirmed by one final vote in the House.
However, this latest reading will give the markets a baseline to work from in the coming months, alongside an idea of how the economy is doing at the tail end of the last stimulus bill.
Investors may not be happy to hear, then, that both the standard and core readings are set to rise month-on-month. The former is looking to climb from 0.3% to 0.4%, while the latter is hoping to jump from 0.0% to 0.2%.
As is clear, even if such an increase materialises, inflation is still erring on the terminally low. The worry for equities is how much investors read into the tea leaves of February’s figures.
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