FTSE 100 movers: Anglo American and Miners send market down

The FTSE 100 continued its slide, with the blue-chip market down 72.15 points (1.16%) to 6,151.37 by mid-afternoon Tuesday.

Driving the market down was Anglo American after it said it will suspend its dividend to investors this year and the next as it announced a "radical" portfolio restructuring and further material costs savings and capex reductions to combat declining commodity prices.

The miner said it will cut its number of assets by 60% as it looks to deliver free cash flow and greater returns through the cycle. In addition, it will consolidate from six to three businesses: De Beers, Industrial Metals and Bulk Commodities.

The news compounded with lower metal prices also drove down fellow miners Glencore, Antofagasta, Rio Tinto and BHP Billiton. Michael Hewson, chief market analyst at CMC Markets, said news that Anglo American “has finally succumbed” to the inevitable and has decided to cut its dividend could well be the shape of things to come, with BHP Billiton and Rio Tinto likely to come into the firing line if iron ore heads inexorably towards $30 a tonne, after breaking below $40 earlier this week.

Mondi was also a big faller after Bank of America downgraded it to ‘underperform’. It’s the first major rating change for the company from a broke after a series of ‘buy’ and ‘outperform’ reiterated ratings early in November.

There wasn’t much good news on the market either. International Consolidated Airlines Group rose with lower oil prices driving up shares. WTI crude was down 1.78% to $36.98 a barrel, while Brent was down 1.37% to $40.17. And Sainsbury led the market, up just 0.58%, after Bernstein said that where discount retailer Aldi isn't able to maintain price leadership, instead of running loss leaders, it is likely to reduce its branded range.

“This is good news for the big-four for two reasons: firstly it demonstrates that Aldi will not cut prices forever and secondly it improves one of their major competitive advantages – you can get the brands you love.” Bernstein said Sainsbury's maintains its best-ever pricing on branded goods in November while Tesco relies on 'brand guarantee' to improve price reality but without having to continuously adjust prices.

FTSE 100 - Risers

Sainsbury (J) (SBRY) 243.10p 0.58%
International Consolidated Airlines Group SA (CDI) (IAG) 587.50p 0.09%
National Grid (NG.) 913.50p 0.07%

FTSE 100 - Fallers

Anglo American (AAL) 325.70p -11.73%
Antofagasta (ANTO) 443.70p -7.16%
Mondi (MNDI) 1,384.00p -7.05%
Rio Tinto (RIO) 1,930.00p -6.58%
Glencore (GLEN) 79.84p -6.47%
BHP Billiton (BLT) 723.50p -5.45%
Rolls-Royce Holdings (RR.) 581.00p -4.83%
Randgold Resources Ltd. (RRS) 4,091.00p -2.99%
Royal Bank of Scotland Group (RBS) 290.80p -2.90%
Old Mutual (OML) 194.80p -2.89%