London close: resources, financials falter as crude eases, gilt yields fall

London blue-chip stocks fell on Thursday led by a cluster of mining majors and followed by a string of financials, against a fabric of easing crude prices, gilt yields and soaring gold.

Angtofagasta, Glencore, BHP Billiton, and Anglo American led the pack, sold on concerns about China's economy and as copper fell. Financials RSA Insurance, Prudential, Standard Chartered and Legal & General followed. To the upside, US interest rates-sensitive utilities featured.

For its part, the Footsie saw the day out with losses of 69.93 points or 1.10% to end the day at 6,231.89.

At 16:29 BST, gold was up 0.78% to $1272 an ounce, but copper lost 1.67% to $202.7 an ounce. West Texas Intermediate was down 0.8% to $50.81 a barrel and Brent shed 0.7% to $52.14, this softness followed Wednesday's gains on a drop in weekly US oil inventories.

"Investors were fleeing risky assets like stocks preferring traditional havens like government debt, gold and the Japanese yen," said Jasper Lawler, market analyst at CMC Markets.

"The European Central Bank's purchase of corporate debt has driven yields lower across the bond spectrum. Jitters over a possible Brexit are adding to the lure of the UK's 'safest' asset," Lawler added.

UK 10-year gilt yields fell one basis point to a record low of 1.24% as British investors clamoured for the safety of government debt.

Earlier today, ECB president Mario Draghi warned of lasting economic consequences of years of weak output. Speaking in Brussels, he added that every effort was needed to be devoted to ensuring productivity was returned to potential.

"With years of weak growth eroding Eurozone productivity and potentially elevating the threat of irreversible damage, the European Central Bank remains under immense pressure to act swiftly," said FXTM research analyst Lukman Otunuga.

In other macro news out today, UK's total trade deficit fell to £3.29bn in April, from a downwardly revised £3.53bn in March, said Office for National Statistics. This was the lowest deficit since September and was better than the expected £3.55bn.

These numbers -- and the underlying detail -- were not seen as being welcome reading for UK Chancellor George Osborne as Britain's in-out European Union referendum on 23 June neared, said Dennis de Jong, managing director of UFX.com.

"Both the Leave and Remain camps will likely look to twist this data to their own ends," he said. In related news, Royal Institution of Chartered Surveyors said Brexit and higher buy-to-let tax concerns could see UK house prices weaken in the next few months.

Looking further afield, China's consumer price index rose 2.0% year-on-year in May, down from 2.3% growth the previous month. A reading of 2.2% had been anticipated by the market. The producer price index fell 2.8% in May, from a 3.4% dip in April. Views wee for a 3.2% fall.

Capital Economics' China economist, Julian Evans-Pritchard, expects consumer price inflation to remain near current levels for the rest of the year.

In the US, in the week to 4 June, the initial unemployment claims fell 4,000 to 264,000, the Department of Labor said. A print of 270,000 was expected. US wholesale inventories rose to $587.9bn at end-April, US Census Bureau said. This was up 0.6% from the revised March level and 0.9% higher on the year.

Meantime, back in London, shares in pay-TV operator Sky kicked higher as it inked a deal that will see the company broadcast Germany's Bundesliga football through to 2021 at an average rights cost of €876m a year, from €486m under the existing contract.

Home Retail Group gained after saying Argos' first-quarter sales grew by 2.6% to £868m. Like-for-like sales firmed 0.1%, with underlying like-for-like sales up about 1%. Vodafone slid on confirming it was merging with local subscription television provider Sky to create an integrated telecommunications and media group. Sky's shares rose.

RPC Group jumped after saying it had agreed a £261m deal to buy British Polythene Industries. Essentra, supplier of speciality plastic and packaging components, dropped after warning of lower full year adjusted operating profit amid challenging market conditions in filter products and project delays.

Market Movers

FTSE 100 (UKX) 6,231.89 -1.10%
FTSE 250 (MCX) 17,111.59 -0.39%
techMARK (TASX) 3,094.55 -1.03%

FTSE 100 - Risers

Sky (SKY) 955.00p 2.85%
Carnival (CCL) 3,410.00p 1.76%
Randgold Resources Ltd. (RRS) 6,620.00p 1.38%
Fresnillo (FRES) 1,212.00p 1.17%
Marks & Spencer Group (MKS) 379.30p 1.01%
BT Group (BT.A) 425.25p 0.75%
Intu Properties (INTU) 304.50p 0.56%
Hammerson (HMSO) 583.00p 0.52%
Intertek Group (ITRK) 3,260.00p 0.40%
SSE (SSE) 1,547.00p 0.32%

FTSE 100 - Fallers

Antofagasta (ANTO) 423.40p -6.27%
Glencore (GLEN) 137.95p -5.32%
Vodafone Group (VOD) 219.75p -4.91%
BHP Billiton (BLT) 860.10p -4.54%
Anglo American (AAL) 666.00p -4.52%
Rio Tinto (RIO) 1,967.50p -3.55%
Johnson Matthey (JMAT) 2,975.00p -3.50%
Pearson (PSON) 820.00p -3.48%
RSA Insurance Group (RSA) 477.20p -2.31%
CRH (CRH) 2,098.00p -2.28%

FTSE 250 - Risers

Auto Trader Group (AUTO) 424.10p 5.37%
Melrose Industries (MRO) 403.20p 4.00%
Aveva Group (AVV) 1,750.00p 3.84%
Restaurant Group (RTN) 379.90p 3.73%
Allied Minds (ALM) 346.70p 3.62%
Indivior (INDV) 217.40p 3.52%
RPC Group (RPC) 843.00p 3.37%
DFS Furniture (DFS) 299.10p 2.42%
BGEO Group (BGEO) 2,588.00p 2.29%
Card Factory (CARD) 366.90p 2.26%

FTSE 250 - Fallers

Essentra (ESNT) 600.00p -27.71%
Petrofac Ltd. (PFC) 745.00p -5.11%
B&M European Value Retail S.A. (DI) (BME) 280.00p -4.85%
Aberdeen Asset Management (ADN) 271.70p -4.09%
esure Group (ESUR) 275.50p -3.83%
Weir Group (WEIR) 1,279.00p -3.48%
Amec Foster Wheeler (AMFW) 446.80p -3.27%
G4S (GFS) 185.50p -2.83%
Jimmy Choo (CHOO) 104.00p -2.80%
Zoopla Property Group (WI) (ZPLA) 313.30p -2.70%