FTSE 100 movers: Miners fly south, housebuilders warmed by BoE data

As London woke to the first winter's frost, a flock of commodities heavyweights flapped south to send the FTSE 100 into negative territory on Tuesday.

A fall in metals prices, led by copper, saw investors migrate out of Antofagasta, Fresnillo, BHP Billiton, Rio Tinto, Anglo American and Randgold.

Rio Tinto was also in the news as the US Securities and Exchange Commission (SEC) was reported to have been conducting a high-level and confidential probe into the impairments triggered by the company's acquisition of Mozambique coal miner Riversdale, pre-dating the company's Guinean payments scandal.

There were also reports that despite the recent rally in coal and iron ore price prompting some analysts to forecast higher dividend payouts, major shareholders in BHP and Rio want the companies to use any higher cash flows to pay down debt and for growth projects before considering shareholder returns.

The volatility in oil prices caused by investors' childlike reaction to every comment around the OPEC meeting was a major reason for the wider sector's flighty trading, suggested analyst Jasper Lawler at CMC Markets, which saw joined by oil giants Royal Dutch Shell and BP tag along for the journey.

"Some heebie-jeebies before Wednesday’s OPEC meeting are dragging down the FTSE’s commodity-sensitive sectors," he stated.

Deal or no-deal was the slogan on the mind of Jordan Hiscott, chief trader at Ayondo Markets, noting rumours of an agreed production cut had driven the price in US light crude oil to a recent high of $49.25 but the failure to agree this would see crude prices lose much of recent ground gained.

“OPEC’s much-hyped meetings are beginning to feel like Groundhog Day. In the lead up to the event, expectations of a production cut tend to be high, but the chances of this dwindle whenever we move closer to the meeting," Hiscott said.

“At tomorrow’s meeting in Vienna, OPEC is looking to announce a cut in output by around one million barrels per day. Should we get this, I expect a sharp move above $52. Should it not materialise, I find it hard to see how the market can sustain prices above $45.”

Healthcare provider Mediclinic infiltrated the group of fallers after Jefferies cut its target price on the stock to 741p from 812p. Retaining a 'hold' rating, analysts said all three of the group's businesses appeared to be facing near-term headwinds, leading it to lower its earning per share forecasts. "Delivering on the timetable of expansion projects, outlined in the report, to provide capacity for the next leg of growth will be key to sentiment in our view," they said.

Housebuilders were the main driving force in the other direction, propelled by some reassuring housing data from the Bank of England. Mortgage approvals for house purchases rose 6% in October versus a month earlier, with Barratt Developments, Persimmon and Taylor Wimpey were the biggest beneficiaries.

"It’s certainly good news, but we’re still cautious about what higher inflation next year will mean for house purchases, as the effect of lower sterling starts to hit disposable incomes,” said analyst Nicholas Hyett at Hargreaves Lansdown.

CMC's Lawler added that homebuilders and the pound could come in for some punishment later in the week as markets look ahead to the government's High Court appeal over whether parliamentary gets a Brexit vote.

BT was another on the front foot, despite having slipped in early trading after the telecoms regulator grew tired of the company's dillydallying and said it was beginning the formal process to enforce legal separation of the group's Openreach infrastructure arm. Although Ofcom said it was "disappointed" in the lack of progress BT has made in voluntarily addressing its competition concerns, it fell short of calling for any further measures apart from the separation of Openreach into a subsidiary company with a distinct and separate board.

"Ofcom’s plans don’t go as far as requiring Openreach to be split from the BT Group entirely, so an agreement is probably not far away," said Hargreaves' Hyett, leading to BT shares rising 1.5%

FTSE 100 - Risers

Next (NXT) 4,935.00p 2.39%
Barratt Developments (BDEV) 476.50p 2.36%
Royal Mail (RMG) 465.30p 1.99%
Persimmon (PSN) 1,721.00p 1.77%
Dixons Carphone (DC.) 335.30p 1.76%
BT Group (BT.A) 356.35p 1.73%
ITV (ITV) 169.30p 1.56%
Taylor Wimpey (TW.) 148.60p 1.50%
International Consolidated Airlines Group SA (CDI) (IAG) 442.20p 1.21%
Morrison (Wm) Supermarkets (MRW) 220.30p 1.10%

FTSE 100 - Fallers

Antofagasta (ANTO) 696.50p -4.39%
Fresnillo (FRES) 1,234.00p -3.44%
BHP Billiton (BLT) 1,309.00p -3.36%
Rio Tinto (RIO) 3,048.00p -2.93%
Anglo American (AAL) 1,202.00p -2.83%
Royal Dutch Shell 'A' (RDSA) 1,935.50p -2.71%
Royal Dutch Shell 'B' (RDSB) 2,017.00p -2.65%
Mediclinic International (MDC) 703.50p -2.63%
BP (BP.) 440.75p -2.54%
Randgold Resources Ltd. (RRS) 5,820.00p -2.43%