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London Quick Take – 16 Jan - Shaky start for European stocks as miners fall with copper on China clampdown, defence stocks climb, Wall St catches a bid

Equities 3 minutes to read
Neil Wilson
Neil Wilson

Investor Content Strategist

Note: This is marketing material. This article is not investment advice, capital is at risk.

European stock markets gave back some of Thursday’s gains early Friday, as copper prices fell sharply. Dr Copper has been signalling strong economic growth in 2026 – in nominal terms at least. Apparently, China has moved to clamp down on some high frequency traders at the Shanghai Futures Exchange, which has knocked prices down from record highs, while nickel and tin were also lower. The move weighed on miners, with Glencore, Antofagasta, Rio Tinto and Anglo American falling around 2%, while Fresnillo and Endeavour Mining were also trading down as precious metals eased back off their record highs with silver at $91, although still above the low at $86.41 in yesterday’s extremely volatile session. Gold held firm at $4,600, a little below its record high hit this week. The FTSE 100 traded roughly down 0.2%, roughly matching the decline on the DAX early doors, while the CAC was off half a percent. The FTSE 250 - which is a better gauge of UK economic health - ticked higher after hitting a four-year high yesterday...signs of good news for the UK perhaps? Gilt yields rose with the 10yr to 4.4%.

European defence stocks rose on Friday to extend their thumping YTD rally as Nato personnel from a number of European countries landed in Greenland for an exercise after Trump restated his desire to own the island. Hardly a show of force, but a reminder of what’s at stake here. Babcock, BAE Systems and Rolls-Royce all rose more than 1%, while QinetiQ was up over 2%. Elsewhere in crazy geopolitical land, oil prices broadly held their losses from yesterday’s session as the US seems to be backing away from military action in Iran. This situation could change over the weekend, we don’t know.

Wall Street rallied Thursday with the S&P 500 and Nasdaq each closing up almost 0.3% as we saw a bit of bounce in the sectors have come under the cosh a bit this week – banks and tech mainly.

Chipmakers were broadly firmer on Thursday after TSMC’s strong results, with Nvidia and AMD each up around 2% and Broadcom almost 1% higher. It comes as the US and Taiwan strike a $250bn investment deal that will cut tariffs on goods from the country. Taiwan will invest $250bn in US semiconductor manufacturing, in return for credit guarantees and bringing tariffs down from 20% to 15%, in line with Japan. The move may be part of a US strategy to reshore and protect US chip access in the event of China invading Taiwan. Elsewhere in tech it was mixed - Alphabet and Apple fell, while Meta climbed.

Banks rallied after a tough week as strong results from Goldman Sachs and Morgan Stanley boosted confidence. GS rose over 4% and MS was up almost 6%. Markets underappreciate the extent of potential US growth this year. Lower oil prices, depreciating US dollar, the One Big Beautiful Bill (1% of GDP coming down the pipeline in fiscal expansion), looser financial conditions, high AI investment and productivity gains. Forward-looking market internals point in this direction with cyclicals vs defensives +12% roughly since November.

Finally, the yen was firmer against the dollar as the Japanese finance minister pointed to a joint statement with the US from last year referring to currency intervention. Sterling stablised around the 1.340 anchor after slumping yesterday following the GDP report. EURUSD broke below 1.16 before recovering to 1.161 and is coming into range of the 200-day moving average support at 1.1588. 


I had a look at some key investing themes for 2026 here
and
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