Sector movers: Precious metals miners, lenders pace losses

(Sharecast News) - Precious metals miners and lenders' shares paced losses on the FTSE 350 as the Bank of England and Norges Bank surprised with 50 basis point interest rate hikes. In the background meanwhile, in his second day of testimony before Congress, Fed chairman Jerome Powell reiterated that a "strong" majority of policymakers were expecting two more rate hikes.

"The FTSE 100 has fallen to a three-week low today as investors worry about the impact of more rate hikes on the UK economy. The losses are even more pronounced on the mid-cap FTSE 250 due to its UK exposure," said IG chief market analyst Chris Beauchamp.

"A recession in the UK now seems an inevitability with the Bank of England committed to more rate hikes, and at a faster pace. Everything is now subordinate to the task of getting inflation under control, with heightened recession risk accepted as a necessary evil."

Against that backdrop, the Bloomberg commodity index was falling 1.72% to 229.76, alongside a 0.97% decline for August gold on COMEX to $1,926.10/oz..

And in the government debt space, the yield on the benchmark 1-year Gilt was climbing 10 basis points to 5.244%, having notched up a fresh 52-week high at 5.305%.

For his part, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he disagreed with market pricing for a 6.0% peak in Bank Rate.

He nonetheless upped his own forecast to 5.50% and told clients to expect 25bp hikes in August and September.

Top performing sectors so far today

Beverages 25,806.56 +0.67%

Chemicals 9,660.69 +0.61%

Industrial Transportation 3,888.71 +0.55%

Personal Goods 29,929.19 +0.18%

Leisure Goods 26,057.57 +0.14%

Bottom performing sectors so far today

Precious Metals and Mining 10,086.12 -2.36%

Banks 3,510.85 -2.02%

Non-life Insurance 2,973.63 -2.02%

Aerospace and Defence 6,353.11 -1.90%

Real Estate Investment Trusts 2,027.17 -1.89%