Miners and homebuilders pace losses, precious metals miners shine

Miners and homebuilders weighed on the main UK equity benchmarks the most, against a backdrop of sovereign bond yields slipping to record lows and some market commentary flagging the risk of sharp drops in equity markets.

The yield on the benchmark 10-year Gilt closed one basis point lower at 1.24%, having hit 1.22% earlier in the day, its lowest level since at least 1989, according to Bloomberg data.

Similarly-dated German and Swiss debt were also to be seen at record lows on Thursday.

To take note of, billionaire investor George Soros had recently taken a more 'active' role at his family office after growing increasingly concerned regarding the outlook for the world's economy and the risk of large near-term market risks, according to Bloomberg and The Wall Street Journal.

His strategy apparently included buying gold and shares of gold miners.

Investors were also thought to be increasingly wary ahead of the upcoming US Fed policy meeting on 15 June, followed by close behind by the EU referendum.

Indeed, gold futures were one of the few bright spots in the market, together with stock in Randgold Resources and Fresnillo, with all of them defying a bounce in the US dollar from one-month lows.

As of 21:15 BST, front month COMEX-traded gold futures were up by 0.74% to $1,271.70/oz. In parallel, the US dollar spot index was advancing 0.40% to 93.97.

That same dollar strength also appeared to be the main factor behind weakness in crude oil futures and some metals' pricess; hence in part the drops seen in shares of oil equipment&services outfits and miners.

However, the main trigger for the drop in copper futures appeared to be fresh reports that copper stockpiles at LME warehouses were continuing to pile up.

Three-month LME copper futures finished the session lower by 1.8% to $4,505.00 per metric tonne.

In a research note sent to clients and dated 7 June, analysts at Macquarie highlighted how inventories had jumped 27.6% in two days to 196.2kt. The FT reported on Thursday that inventories had reached 213,225 tonnes that same day, following another 9,000 tonne increase.

"Whatever the motivation, copper stocks have gained 27.6% in just two days, to 196.2kt, considerably easing the previously tight LME forward curve," the Australian broker said.

Housing stocks were weighed down by the latest RICS house price balance, which fell from +39 in April to +19 in May.

In parallel, a poll conducted by Reuters revealed that on average economists expected house prices in the UK to grow 4.1% in 2017 if the 'Remain' camp comes out on top in the 23 June referendum, but to be flat should the opposite occur.

Automobiles&Parts also retreated, with shares of the sole UK-listed outfit in that universe, GKN, retreating, despite positive comments from the likes of UBS.

"In May, China passenger vehicle retail sales posted growth of +14.5%yoy (+10.2%ytd) from 8.1%yoy in April (according to China car association CPCA). We attribute the higher than expected sales growth to an improvement in consumer confidence on the back of a more benign macro picture.

"For GKN and Aisin, we don't think the improving newsflow in China autos is priced in," UBS analyst David Lesne said in an extract of a research report published on 8 June.

Mobile Telecommunications fared worst, dragged lower by shares of Vodafone after going ex-dividend.

Top performing sectors so far today
Industrial Metals & Mining 1,300.03 +0.69%
Fixed Line Telecommunications 4,840.30 +0.63%
Electronic & Electrical Equipment 4,375.00 +0.48%
General Industrials 4,720.61 +0.28%
Real Estate Investment & Services 2,725.19 +0.24%

Bottom performing sectors so far today
Mobile Telecommunications 4,923.05 -4.74%
Mining 9,285.04 -3.62%
Oil Equipment, Services & Distribution 13,194.74 -2.75%
Automobiles & Parts 6,434.36 -2.13%
Construction & Materials 5,313.68 -1.83%