FTSE 100 called lower as pound pushes towards three-year highs

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The FTSE 100 is set to retreat slightly on Tuesday as a strengthening pound adds pressure after a solid start to the week.

London’s blue chip index has been called eight points lower by traders in London, having climbed 34 points or 0.5% to 6,523.53 a day earlier.

Overnight, US stock indices marked new highs, with the Dow Jones rising almost 238 points or 0.8% to 31,385.76, while the S&P 500 climbed 0.7% and the Nasdaq jumped 0.95%.

Although markets seem a bit toppy to some, investor enthusiasm means “the momentum behind this reflation trade remains a force to reckon with,” said market analysts at IG.

Bitcoin was also seeing inflation, soaring to fresh record highs above US$47,000 overnight with the catalyst being the news that Tesla bought US$1.5bn worth of the cryptocurrency and plans to start accepting it as payment.

Oil and metals prices were also inflating on the back of the hopes of a US stimulus package.

“Lately there have been creeping concerns about higher inflation being in the pipeline on account of all the money that has been injected into financial systems from central banks and governments,” said analyst David Madden at CMC Markets.

“Gold has traditionally been a popular inflation hedge. Dealers snapped up the yellow metal for fears that higher inflation is on the horizon. Industrial metals, like copper, silver and platinum rose too as economic activity should increase as a result of the $1.9trn relief programme.”

Around the markets

Pound: up 0.3% at $1.3787

Gold: up 0.5% at $1,839.21

Oil: up 0.8% at $61.16

Bitcoin: up 22% at $47,931.03

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly higher on Tuesday after Brent crude prices crossed US$60 per barrel for the first time in more than a year.

The Hang Seng index in Hong Kong gained 0.27% while the Shanghai Composite in China surged 1.94%.

In Japan, the Nikkei 225 gained 0.40% but South Korea’s Kospi dipped 0.21%.

Shares in Australia retreated, with the S&P/ASX 200 closing 0.86% lower.


Proactive Australia news:

Australian Strategic Materials Ltd’s (ASX:ASM) (OTCMKTS:ASMMF) titanium powder has been confirmed by Korean 3D printing group HANA AMT as being of high purity, paving the way for its use in 3D printing.

TNT Mines Ltd (ASX:TIN) has extended mineralisation to the north and south of the existing pit area following a maiden reverse circulation (RC) program testing four separate target areas at the Eureka Gold Project near Kalgoorlie in Western Australia.

Montem Resources Corp’s (ASX:MR1) scoping study on the Chinook Coking Coal Project in the Crowsnest Pass area of Alberta, Canada, indicate an economically and technically viable project with upside justifying progressing to a pre-feasibility study (PFS).

Pharmaxis Ltd (ASX:PXS) (OTCMKTS:PXSLY) (FRA:UUD) has exported the first shipment of its locally developed and manufactured drug Bronchitol® (mannitol) to the US after the cystic fibrosis (CF) treatment was approved by the US Food and Drug Administration (FDA) in October 2020.

Carnavale Resources Limited (ASX:CAV) (FRA:YBB) is encouraged by results from a first pass 6,539-metre aircore drilling program at Kookynie Gold Project in the Western Australian Goldfields.

Matador Mining Ltd’s (ASX:MZZ) exploration drilling has resulted in the discovery of four new high-grade gold zones at its 100%-owned Cape Ray Gold Project in Newfoundland, Canada.

Astro Resources NL (ASX:ARO) is advancing its portfolio of diverse assets over 2021 with work underway at the Needles Gold Project in Nevada, the Governor Broome Heavy Mineral Sands Project and the Kimberley Diamonds Project in Western Australia.

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