FTSE 100 up 25 points at 10,248
Gold, silver and copper meltdown hits miners
Defensive stocks provide support
11.13am: Reading the mood
The manufacturing PMI data is an indicator of improving mood in the sector rather than hard data, says Matt Swannell, chief economic advisor to the EY ITEM Club, indicating that 2026 “will likely be another year of modest growth for the sector”.
While the survey points to a third consecutive month of growing activity, with new orders continuing to rise despite elevated geopolitical uncertainty, Swannell says the PMI “should be taken with a heavy pinch of salt”.
“In recent years, it’s been a better barometer of manufacturers’ mood rather than a true indicator of changing activity.
“With the recent heightened uncertainty around future international trading arrangements, the latest pick up could quickly change course.
“It’s likely that 2026 will be another subdued year for UK manufacturers as fiscal policy continues to tighten, households’ real income growth is set to slow, and international trade policy uncertainty remains elevated.
“Even with business reported to be on the up, rising costs are still causing manufacturers to reduce headcount. Rising domestic cost pressures combined with the higher cost of some raw materials are still working their way through the production line too.
“In response, output price inflation picked up further in January.”
With a BoE monetary policy committee decision on Thursday, Swannell says it is likely to see the base rate left unchanged, as members wait to see the extent to which pay growth and inflation are affected for the whole economy.
10.42am: FTSE in green
The FTSE 100 is in positive territory now.
Partly this reflects the falls easing for the mining giants (Endeavour and Feresnillo both down less than 5% now), but also gains elsewhere.
Holiday Inn owner IHG is top of the leaderboard, up 2.4%, followed by Marmite maker Unilever, up 2.2%, and insurers Beazley, Aviva and Admiral, all up 2% or more.
AstraZeneca is up 1.35% on the day when its shares begin trading directly on the NYSE later, with positive news on a cancer drug in the EU too.
Other ‘defensives’ are helping support the index too, including BAT, GSK, Haleon and Vodafone.
10.14am: Businesses are adapting
After the S&P Global manufacturing PMI rose to 51.8 in January from 50.6 in December, above the consensus, economist Elliott Jordan-Doak at Pantheon Macroeconomics says the improvement in the PMI’s sub-indices in January “provides us with further encouragement that the steady momentum seen in recent months can be maintained”.
With the manufacturing future output balance leaping in January to 75.2, from 70.8 in December, and export orders improving too, Jordan-Doak says this suggests that “businesses are adapting to the chronic tariff-related uncertainty that dogged export orders over the past year”.
Admittedly, he adds, “stronger demand is failing to translate into a sustained improvement in hiring”, though the employment balance is now at its best level since October 2024 when Rachel Reeves first announced the payrolls tax hike.
9.43am: UK manufacturing survey signals growth for third month in a row
UK manufacturing sector activity has strengthened to a 17-month high, according to the S&P Global purchasing managers’ index.
The UK manufacturing PMI for January has come in slightly stronger than expected at 51.8, up from the 51.6 ‘flash’ reading mid-month and up from 50.6 in December.
The PMI has signalled growth for three consecutive months.
“UK manufacturing made a solid start to 2026, showing encouraging resilience in the face of rising geopolitical tensions,” says Rob Dobson, director at S&P Global Market Intelligence.
“Rates of output and order book growth accelerated, while new export business rose for the first time in four years, with Europe, China and the US the main recipients.
“There was also a positive bounceback in business confidence, which rose to its highest level since before the 2024 autumn budget, as manufacturers focussed on opportunities lying ahead despite persistent concerns about the geopolitical environment, Government policy and tariff tensions.”
The strongest rise in new business for almost four years was not enough to fully quell reductions in staff numbers, but the rate of cutting slowed to its weakest since job losses started 15 months ago, he adds.
“Cost pressures are creeping higher though, as the pass through of the increased minimum wage and employer NI contributions continue to work through the supply chain alongside the rising costs for commodities such as metals.”
8.48am: FTSE’s defensive names provide support
While commodities groups lead the retreat, with banks and some defence contractors joining in, more than half of the Footsie shares are in positive territory this morning.
Among the bigger names, these include Unilever, up 2.3%, followed by British American Tobacco, AstraZeneca, National Grid and Compass and RELX, all up around 1%, while Rolls-Royce, Diageo and GSK are also risers.
The FTSE’s losses have been cut to just below 25 points now at 10,199.
Here’s Richard Hunter, head of markets at Interactive Investor, says these risers are mostly “more defensive stocks” and the selling in commodities names “could herald the beginning of a more guarded approach” after recent record-setting.
He says the reasons for the steep declines in gold, silver and others are “not immediately obvious,” he says forced selling on major margin calls is likely to be a factor.
“The recovery of the US dollar will also have had an impact, given its inverse price relationship to gold, while there is also speculation of a heavy unwinding of long positions which has left traders rushing for the exit at the same time.”
Investors will have much to digest this week, with the release of various economic datam, including the US non-farm payrolls on Friday, plus a Bank of England meeting the day before.
“The reporting season is now in full flight, and updates are expected across a range of sectors from the likes of Walt Disney, Pfizer and AbbVie. However, particular focus will fall on results from Alphabet, Amazon and Advanced Micro Devices, particularly given the rough treatment which was handed out to Microsoft last week,” Hunter adds.
“This came amid heightening concerns over the hundreds of billions of dollars which are currently being pumped into AI development and the timeframe of any return on these investments.”
8.15am: Miners lead retreat as FTSE opens lower
The FTSE 100 dropped 57 points in initial trading but has seen these losses quickly pared to below 40.
Leading the fallers are Endeavour Mining and Fresnillo, down 6.9% and 6.2% as precious metals retreat from the peaks seen only a week ago at a fast march.
Antofagasta shares are down 4.4% as copper also backs off recent highs, while more diversified mining and commodities group Glencore’s down 3% and Anglo American is down 2.8%.
Oil and gas heavyweights BP and Shell have dropped 2.3% and 2.2%, meanwhile.
7.35am: Asian stocks plunge
Asian stocks are giving an indication of what’s in store for European markets, with most major benchmarks firmly in the red.
In Tokyo, the Nikkei 225 is down 1.25%, while the Hang Seng has plunged 2.7% in Hong Kong and the Shanghai Composite index has skidded 2.5% lower.
India’s Sensex is a rare riser, up 0.5%.
As last week closed it saw the month end with “extraordinary volatility”, says Deutsche Bank macro strategist Jim Reid, with silver experiencing its largest daily fall since 1980 (36% at the intraday lows, 26.3% at the close), while gold recorded its biggest one-day decline since 2013 (8.95%).
“The recent run up in precious metals feels to have an enormous speculative element. Friday’s moves, almost certainly driven by positioning and margin dynamics, only reinforced that impression,” Reid adds.
A partial US government shutdown, while it is expected to be resolved soon, is “typical of the 2026 constant stream of complicated news flow”, with January managing “to both shock and awe in various ways, yet still delivered broad based gains across all global assets in our monthly performance review when measured in USD terms—a genuinely rare occurrence”.
The clear catalyst for Friday’s sell-off appeared to be news that Kevin Warsh had secured the nomination for Fed chair, Reid says.
“Warsh is known to be more hawkish on the balance sheet than other candidates, pushing back against the prevailing debasement narrative that has supported precious metals.
“That said, price action had long since detached from any sane discussion on debasement, but it often takes only a small ripple to trigger a broader correction, especially when there is leverage around.”
7.16am: FTSE 100 called sharply lower as commodities and crypto crumble
The FTSE 100 is expected to slump out of bed at the start of the week, with the new month of February bringing a new big sell-off in gold, silver, copper, bitcoin and other assets.
London’s blue-chip index has been called 80 points lower early on Monday, after it added just over 80 points last week to close at 10,223.5, having climbed 272 points during the month, including notching new intraday highs.
But the week begins with gold down over 7% to $4,536 an ounce, silver down 12% to $74.3/oz, copper down 4.7% to $5.64/t, brent crude oil down 4.5% to $66.2 a barrel, with natural gas, platinum, lithium and others falling too.
Crypto markets are not proving very ‘uncoupled’, with bitcoin tumbling 2.3% to $76,281 and ethereum down 7.6%.
UK house prices, meanwhile, were up 0.3% last month, according to Nationwide, with an annual rise of 1.0% in January,