The FTSE 100 staged a remarkable recovery on Monday, bouncing back from early losses that had been triggered by a dramatic global sell-off in precious metals and technology stocks. This reversal saw the UK's premier blue-chip index trading 0.4 per cent higher by lunchtime, having initially opened down approximately 0.5 per cent as investors worldwide offloaded risky and commodity-based assets.
Global Market Turmoil and Precious Metals Volatility
Earlier trading sessions witnessed significant turmoil across Asian markets, which experienced their worst performance since the disruptive tariff announcements of the previous April. South Korea's Kospi index, often viewed as a barometer for artificial intelligence trading, plummeted by more than five per cent amid growing concerns about overextended tech stock valuations. Hong Kong's Hang Seng index similarly declined by as much as 2.2 per cent during this period of market uncertainty.
Precious metals continued to exhibit extreme volatility that had begun towards the end of the previous week. The spot price of gold, which had already commenced a sharp descent late last week, cratered by nine per cent to $4,403 per ounce during Asian trading hours. Silver experienced an even more dramatic decline, slumping by as much as 16 per cent to less than $72 per ounce following a substantial 30 per cent crash on Friday. Both metals managed to pare back some of these significant losses as European markets opened, with silver nearly erasing its earlier decline and gold staging a somewhat less pronounced comeback.
Mining Stocks Reflect Metals Volatility
The whipsawing movements across precious metals markets, which followed both assets reaching multiple fresh record highs, were clearly reflected in the performance of FTSE 100 silver and gold mining companies. Fresnillo, a prominent producer of both gold and silver, plunged over seven per cent at market opening before recovering some of those losses. Shares in Endeavour and Antofagasta demonstrated similar patterns of initial decline followed by partial recovery, mirroring the broader precious metals market dynamics.
John Wyn-Evans, head of market analysis at Rathbones, commented on the situation: "Not for the first time in recent market history, we're witnessing a spectacular unwinding of leveraged positions, this time in precious metals. The sharp pullback in gold looks more like a liquidity and positioning event than a change in the long-term case for the asset. After a powerful run-up driven by momentum strategies, short squeezes and leveraged buying, that same positioning has unwound rapidly, amplifying downside moves."
Defensive Stocks Provide Stability
Despite a prevailing risk-off mood across global markets, the FTSE 100's defensive characteristics helped it avoid the worst of the equities rout. The index's largest insurance companies, including Aviva and Beazley, all posted gains exceeding two per cent. Consumer goods giant Unilever, traditionally considered a safe haven investment due to its consistent cash flow generation, climbed 2.3 per cent, providing further stability to the index.
Technology Sector Continues to Struggle
Technology companies largely missed out on the recovery observed in broader equity markets, following a series of earnings reports from artificial intelligence firms that compounded existing fears about potentially overstretched tech valuations. Futures on New York's technology-heavy Nasdaq index were down one per cent, with the index appearing poised to extend a run of losses that began following Microsoft's trading update indicating slowing growth in its cloud division.
Jim Reid, global head of macro research and thematic strategy at Deutsche Bank, reflected on the market conditions: "It's typical of the 2026 constant stream of complicated news flow. This follows a January that managed to both shock and awe in various ways, yet still delivered broad based gains across all global assets."
The day's trading activity highlighted the complex interplay between commodity markets, technology sector valuations, and traditional defensive stocks, creating a volatile environment that tested investor resilience across multiple asset classes.
