The FTSE 100 staged a sharp turnaround this week, clawing back losses triggered by a plunge in precious metals on Monday. The blue-chip index initially stumbled as gold and silver prices retreated, dragging down heavyweight mining stocks, but rebounded vigorously on Tuesday as industrial metal miners and banking shares surged on renewed risk appetite.
Precious Metals Rout Weighs on Index
On Monday, the FTSE 100 came under immediate pressure after a selloff in gold and silver, driven by profit-taking and a strengthening US dollar. Mining giants Fresnillo and Anglo American led the declines, with their shares tracking the spot prices of bullion. The drop sliced through a recent rally that had been fuelled by geopolitical uncertainty and expectations of looser monetary policy. The index’s heavy exposure to natural resource companies meant it was particularly sensitive to the commodity swing, effectively capping any gains from defensive sectors like pharmaceuticals and utilities.
Turnaround on Ceasefire Hopes
By Tuesday morning, sentiment shifted dramatically. Optimism surrounding a potential ceasefire in the Middle East lifted global risk appetite, and the FTSE 100 rebounded 0.5% by 0904 GMT. Industrial metal mining stocks jumped 2.1%, with Rio Tinto, Anglo American and Glencore climbing between 1.7% and 2.8%. The banking index advanced 1.2%, led by Lloyds (up 1.8%) and NatWest (up 2.4%), helping the index stay on course for a sixth consecutive quarterly gain. The UK benchmark recorded gains in 11 of the past 12 months, with March being the only exception.
Economic Backdrop
Fresh data showed Britain’s economy grew 0.6% in the January-to-March quarter of 2026, matching expectations. All major sectors contributed, with services making the largest contribution. However, a separate Lloyds survey indicated that business confidence weakened in June, hurt by persistent cost pressures and global uncertainty, while the British Retail Consortium reported unchanged annual shop price inflation. Food inflation moderated, giving consumers some relief through summer discounts.
Housebuilders Under Cloud
Not all sectors shared the uplift. Homebuilding stocks slumped after reports of a potential multi-billion-pound class action lawsuit over alleged anti-competitive conduct. The house construction index fell 2.8%, dragging shares of Persimmon, Barratt Redrow and Taylor Wimpey lower by 2.4–3.3%. Supermarket group Sainsbury’s rose 2.1% despite warning that the Middle East conflict could fuel higher food inflation, while Saga fell 3% on the FTSE 250 after its half-year results.
The whipsaw moves highlight the FTSE 100’s unique sensitivity to commodity cycles and the broader economic cross-currents that continue to buffet UK equities.
