Miners, telecoms lead falls

Shares of telecommunications and mining outfits led fallers on the market at the start of June, as investors chose to take profits ahead of several key risk events scheduled over the next two days, including the outcome of the Organisation of the Petroleum Exporting Countries´s ministerial meeting the next day and Friday´s monthly US jobs report.

As if that were not enough, investors were also bracing for upcoming policy decisions from the world´s three most influential central banks, the Bank of Japan, the European Central Bank and the US Federal Reserve.

Acting as backdrop, there appeared to be a fair amount of 'market-chatter' regarding the outlook for the Chinese currency and what impact that might have on markets.

Waiting for the other shoe to drop?

In a research report sent to clients on 31 May, Jim Reid at Deutsche Bank pointed out how the Chinese yuan had weakened by 1.6% against the US dollar since its April highs, thus falling by the same amount as in January but without triggering a response in markets.

"Intriguingly, European equities have tracked the CNY/USD pretty closely over the past year – but have not yet reacted to the latest move lower in the Chinese currency, pointing to some downside risk for their market," Reid said.

Manufacturing sector surveys released on Wednesday in Asia´s largest economy in fact printed slightly ahead of expectations.

The official manufacturing PMI held steady at 50.1 (Consensus: 50.0).

That prompted analysts at Capital Economics to write to clients, saying: "The upshot is that while policy easing has clearly helped to stabilise growth in China this year, a significant rebound is proving elusive. We still think that the data out of China will improve rather than worsen over the next couple of quarters as stronger credit growth continues to feed through. But the likelihood that growth could merely hold steady this year is rising."

In turn metals´ prices moved uniformly lower, with COMEX-listed July 2016 copper futures down by 1.17% to $2.0171 per pound as of 19:51 BST.

Top performing sectors so far today
Industrial Metals & Mining 1,115.86 +2.07%
Personal Goods 27,270.25 +0.73%
Health Care Equipment & Services 7,200.95 +0.66%
Automobiles & Parts 6,457.74 +0.47%
Pharmaceuticals & Biotechnology 12,497.79 +0.41%

Bottom performing sectors so far today
Fixed Line Telecommunications 4,908.65 -2.55%
Mining 8,614.23 -1.93%
General Retailers 2,728.87 -1.92%
Financial Services 8,864.76 -1.58%
Life Insurance 6,968.05 -1.55%