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The FTSE 100 has continued to advance despite the fall in the price of gold, with Fresnillo and Endeavor Mining seeing significant share price declines.
The FTSE 100 index rose 23.42 points, 0.3%, to close at 9,426.99.
The FTSE 250 rose 39.82 points, 0.2%, to 21,908.30 but Objective The All-Share fell 5.20 points, 0.7%, to 765.86.
Sleep The precious metal was trading at US$4,131.30 an ounce on Tuesday, down 4.9% from $4,345.43 (£3,237) on Monday. The price of silver fared even worse, falling 6.8%.
Kathleen Brooks, research director at CPIWhich will be released later this week, may be softer than expected.
But Ms Brooks pointed out that the gold price had still not overcome Monday’s low and said the turmoil in the asset market was a sign of “healthy price action”.
“This shows that investors can’t get too ahead of themselves and there are limits to enthusiasm,” he said.
The sharp fall was reflected in the FTSE 100, where gold miner Endeavor Mining fell 9.7%, while gold and silver miner Fresnillo fell 12%.
On the FTSE 250, gold and silver miner Hochschild Mining fell 14%.
Tickmill’s managing principal Joseph Dahrih said selling pressure could increase this week with signs of a resolution to the US government shutdown.
He said White House officials suggested talks were moving forward, allaying some of investors’ concerns and reducing calls for a defensive stance.
Elsewhere, Office for National Statistics data showed that UK public sector borrowing, excluding banks, rose to £20.2 billion in September, up £1.6 billion or 8.6% from a year earlier – the highest September figure in five years.
This figure came right up to the office Budget The liability is estimated at £20.1 billion, but the FXStreet-cited consensus is slightly lower at £20.5 billion.
Elliot Jordan-Doke, senior UK economist at Pantheon Macroeconomics, estimates borrowing will reach £126.9 billion for the financial year 2025 to 2026, well above the OBR’s March forecast of £117.7 billion.
“The material overhang…provides a difficult backdrop for the budget,” he said.
“All told, we expect the OBR to say that the Chancellor’s £9.9 billion fiscal headroom has turned into a £15 billion hole. We think the Chancellor will plug that hole, and aim for a wider £20 billion margin of headroom by increasing budget stealth, sin, pensions and wealth taxes, as well as targeting spending cuts.”
At the close of the London equities market on Tuesday, the pound fell to US$1.3390, down from US$1.3424 on Monday.
The euro stood at $1.1612, lower than $1.1662. The dollar was trading at 151.74 yen against the yen, higher than 150.52 yen.
In European equities on Tuesday, the CAC 40 in Paris closed 0.6% higher, while the DAX 40 in Frankfurt rose 0.3%.
Stocks in New York were mixed at the time of London close. The Dow Jones Industrial Average was up 0.7%, the S&P 500 was 0.1% higher, while the Nasdaq Composite fell 0.2%.
The yield on US 10-year Treasuries was reported at 3.96%, down from 4.00% on Monday. The yield on the US 30-year Treasury stood at 4.54%, down from 4.59% on Monday.
On Wall Street, General Motors reached top gear after raising full-year guidance and saying the damage from Donald Trump’s tariffs would be smaller than expected.
Shares of the Detroit-based carmaker rose 15% after Chief Executive Mary Barra reported a “very good quarter of earnings and free cash flow.”
“The overall sentiment is that a company is operating on all cylinders in terms of the factors that management can control, and visibility is improving with respect to factors outside of management’s control,” said JPMorgan analyst Ryan Brinkman.
Meanwhile, Warner Bros. Discovery shares rose 11% after the company began reviewing “strategic options to maximize shareholder value” and said it would consider a sale.
The California-based media and entertainment company said it launched the review in the wake of “unsolicited interest” received from “numerous parties” for both the company as a whole and Warner Bros. alone.
Last month, a Wall Street Journal report said that recently merged Paramount Skydance was preparing a takeover bid for Warner Bros. Discovery.
On the FTSE 100, Seguro rose 2.9% as the London-based property developer said it signed £22 million of new headline rents in the third quarter, up 47% from £15 million a year earlier.
Chief executive David Sleeth said the group was seeing “building momentum” in its growth program and highlighted “a significant value creation opportunity” in its growing data center pipeline.
Coca-Cola HBC closed down 0.9% after it announced the acquisition of a 75% shareholding in Coca-Cola Beverages Africa from Coca-Cola and Gutsche Family Investments for $2.6 billion.
The deal creates the second-largest Coca-Cola bottling partner by volume globally, with market leadership across Africa and Europe.
Switzerland-based soft drinks bottler Zug said the agreement opens up growth opportunities and is expected to deliver low-single digit earnings per share growth in the first full year following completion.
“This reaction indicates some nervousness on the part of the market,” said Russ Mould, investment director at AJ Bell.
He said, “Coca-Cola HBC already has experience in Africa, having built a presence in Egypt and enjoying a long-standing footprint in Nigeria. However, operating more widely across the continent will still involve risks, and Coca-Cola HBC hopes these will be justified by the growth opportunities on offer.”
Brent oil traded at $61.26 per barrel late Monday night, up from $60.69.
The biggest risers on the FTSE 100 were Melrose Industries, up 32.00p at 634.00p, JD Sports Fashion, up 2.86p at 98.34p, Segro, up 19.20p at 691.80p, Whitbread, up 84.00p at 3,057.00p and WPP, up 8.60p. 356.20p.
The biggest fallers on the FTSE 100 were Fresnillo, down 294.00p at 2,114.00p, Endeavor Mining, down 330.00p at 3,068.00p, Entene, down 25.80p at 786.20p, Anglo American, down 69.00p at 2,826.00p and Antofagasta, down 61.00p At 2,636.00p.
Wednesday’s global economic diary sees UK inflation data and Japanese trade data.
The UK corporate calendar features third-quarter results from lender Barclays, gold and silver miner Fresnillo and consumer goods firm Reckitt Benckiser.
– Contributed by Alliance News.