FTSE 100 movers: BHP and Shell lead fall, Randgold and Sports Direct only risers

The FTSE 100 was wallowing in negative territory on Wednesday afternoon, with resources stocks leading the retreat.

At 1530 the blue chip index was down 3% at 5,700.26, with BHP Billiton the biggest faller.

Earlier, the miner had unveiled a mixed second-quarter trading update, maintaining full year guidance for oil, copper and coal but cutting iron ore production, as expected, due to the dam disaster at Brazil's Samarco. Underlying half-year profits will be hit by charges of up to US$450m due to redundancy costs, write-downs and taxation matters, with more to come from Samarco once the fallout can be better estimated.

Analysts at Societe Generale said production was better than it expected but warned that if management could stick to current dividend payout policy they will risk a credit rating downgrade, while Investec chopped its price target on the shares to 581p from 943p and assumed a new dividend payment regime based on a 25% payout ratio on sustainable operating cash flows.

BHP was also hit by oil sliding to fresh 12-year lows, below $28 on the NYMEX, which also put the heat on other oil companies. Base metals also took a hammering during mid afternoon trading on the London Metal Exchange with every three-month futures contract in negative territory bar tin.

Royal Dutch Shell was another big faller, down to lows last seen in 2008. Investors were treated to a year-end trading update that was generally in line with expectations, with fourth-quarter profits down 40% to between $1.6bn and $1.9bn. Shell said it expected full year earnings on a current cost of supplies basis, excluding identified items, to range from $10.4bn (£7.3bn) to $10.7bn.

"What is more concerning is the recent declines in Shell’s share price has been accompanied by a rise in volumes which suggests that investors are starting to lose confidence, at a time when questions marks are increasingly being asked about the size of the price tag of the deal with BG Group," said CMC analyst Michael Hewson.

Along with sector stablemates Glencore and Rio Tinto, Anglo American was another big faller despite agreeing to sell its 100% interest in the Callide thermal coal mine in Queensland, Australia, to Batchfire Resources for an undisclosed sum. It was another to have its target price slashed by Investec, to 152p from 402p, on a lower commodity price outlook, along with continued capex spend and a challenged balance sheet.

Randgold Resources was one of only two rises, climbing higher on the back of gold prices that rebounded back above $1,100 an ounce.

With the shares hitting lows not seen since late 2012, Sports Direct was the only other stock in the green. Analyst Brenda Kelly from London Capital Group suggested short covering was the likely reason, with bargain hunters lurking.

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 4,400.00p 3.09%
Sports Direct International (SPD) 402.20p 1.87%
SABMiller (SAB) 4,124.00p -0.34%
Hargreaves Lansdown (HL.) 1,256.00p -0.71%
easyJet (EZJ) 1,620.00p -0.74%
Inmarsat (ISAT) 1,041.00p -1.23%
DCC (DCC) 4,992.00p -1.34%
AstraZeneca (AZN) 4,252.50p -1.39%
Intertek Group (ITRK) 2,686.00p -1.43%
Taylor Wimpey (TW.) 182.00p -1.52%

FTSE 100 - Fallers

BHP Billiton (BLT) 580.10p -7.49%
Anglo American (AAL) 221.90p -7.08%
Royal Dutch Shell 'A' (RDSA) 1,277.00p -6.45%
Royal Dutch Shell 'B' (RDSB) 1,282.50p -6.35%
Carnival (CCL) 3,516.00p -5.81%
Glencore (GLEN) 74.57p -5.58%
St James's Place (STJ) 877.00p -5.19%
Aberdeen Asset Management (ADN) 216.60p -5.12%
Rio Tinto (RIO) 1,577.00p -4.83%
Prudential (PRU) 1,325.50p -4.81%