Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Stocks in mining corporations and banks have been going through what can reasonably be likened to a roller coaster ride.In previous months, banking and mining stocks had been experiencing terrible lows on the London Stock exchange trading floors. During those months, miners recorded considerable losses and dragged UK stocks lower into negative territory. These losses were largely due to lackluster growth signals emanating from China. Some of the major mining corporations that posted the hugest losses during this period include Anglo American Plc. (LSE:AAL), BHP Billiton (LSE:BLT), Rio Tinto (LSE:RIO), Xstrata Plc. (LSE:XTA), and Antofagasta Plc. (LSE:ANTO). The situation at the time seemed even bleaker in light of statements made then by Chinese Central Bank Adviser, Song Guoquing, that China’s economy was not showing any signs of rebounding any time soon. He even warned that tight monetary conditions to be implemented in the country would likely hamper overall investments.
Likewise, banks stocks had not been doing too well as well in preceding months. Banks in London were nudging lower along with the broader European financial sector due to rising concerns over the economic situation in Greece. Barclays Plc.(LSE:BARC), Standard Chartered Plc. (LSE:STAN), and Royal Bank of Scotland Group Plc. (LSE:RBS), were among the most affected banks.
Things started to look up when risk appetite among bank and mining stock investors across Europe began to increase due to a number of factors. First of all, banks such as the Royal Bank of Scotland, Lloyds (LSE:LLOY), and Barclays, owe their most recent spate of success, and accompanying increases in domestic and international demand for their stock, to ratings upgrades awarded to them by Liberum Capital.
Likewise, mining stocks started recording impressive gains as a result of rising optimistic market sentiment being promoted by the expected merger between mining titan, Xstrata Plc., and commodities trader, Glencore (LSE:GLEN).
In light of this positive trend, several experts held on to their positive stances on both mining and bank stocks. Several optimistic experts even stated that though some mining and banking stocks might underperform in the months to come, the combined ‘Glenstrata’ entity certainly fell among their top picks for the long term.
Sadly however, this spate of success was only short-lived as mining and banking stocks began to crash once more. Just like the previous decline, the positive trend was abruptly cut short by re-emerging cuts in China’s growth forecasts. And once again, mining corporations such as Vedanta Resources Plc. (LSE:VED), EVRAZ Plc. (LSE:EVR), and BHP Billiton, as well as banks such as the Royal Bank of Scotland and HSBC Holdings Plc. (LSE:HSBA), began recording considerable losses on their stocks and shares.
