FTSE 100 movers: Mining shares slide, housebuilders rally

The FTSE 100 fell 0.41% to 7,156.95 points in Wednesday afternoon trade, led by mining shares.

BHP Billiton was the top faller following reports workers at its Escondida copper mine in Chile vowed to start an indefinite strike on Thursday after the miner failed to produce an agreement following weeks of negotiations. The company said production would stop due to the strike.

Rio Tinto, which has a 30% interest in the Escondida mine, was also on the back foot. Shares were higher earlier in the session after the miner said it swung to a profit in the year to the end of December thanks to a recovery in commodity prices, while announcing a better dividend than expected and a $500m share buyback.

Royal Dutch Shell was under the cosh as it submitted a comprehensive decommissioning programme to the Department for Business, Energy and Industrial Strategy (BEIS) for the Brent oil and gas field in the North Sea, kicking off a 60-day public consultation.

Meanwhile, a slump in oil prices put pressure on producers after data showed a build in crude inventories last week.

The Energy Information Administration on Wednesday said crude inventories rose by 13.8 million barrels to 508.6 million. Analysts had estimated a build of 2.5 million barrels, a fifth consecutive weekly increase.

Earlier, the American Petroleum Institute revealed late on Tuesday a 14.2m barrel build in its crude oil inventory last week, compared to a 5.8m barrel rise the week before and expectations for a 2.5m build.

Brent crude fell 0.53% to $54.76 per barrel and West Texas Intermediate edged down 0.81% to $51.75 per barrel at 1558 GMT.

Hargreaves Lansdown was sitting lower as a broker downgrade offset improved half-year profits and a 10% increase in the dividend. Numis cut its rating on the stock to 'hold' from 'buy' due to its recent strong run.

Going the other way, housebuilders continued to rally a day after the government released its housing white paper. The white paper outlined the government’s strategy for solving the housing crisis, including measures to support more affordable homes for the rental market and accelerating construction.

“One of the most striking points we found in the white paper was the government’s view that, in its view, those developers offering more modern methods of construction (mmc) should be favoured over those that don’t when planning is given/gov’t land is sold off,” HSBC said.

HSBC reiterated its buy rating on the sector and said it believes Persimmon and Berkeley will benefit most from the drive to favour factory built homes while Bellway and Crest Nicholson also offer value.

The sector also benefitted from well-received updates from Redrow and Grainger.

Housebuilder Redrow added 50% to its dividend after enjoying strong growth in the first half of its financial year and beginning 2017 with a record order book and strong sales momentum.

Residential landlord Grainger said in a trading update that it has made a “good start to the year” with positive progress in lettings and rental growth. The company’s chief executive Helen Gordon also welcomed the government’s white paper on housing, saying “represents a significant shift in focus, rebalancing government housing policy toward a broader, more holistic approach, which moves away from primarily focusing on home ownership and recognises that the UK needs homes to rent, as well as homes to buy, to solve the housing crisis”.

FTSE 100 - Risers

Persimmon (PSN) 2,025.00p 3.47%
Taylor Wimpey (TW.) 177.90p 3.37%
Capita (CPI) 513.50p 3.15%
Rolls-Royce Holdings (RR.) 718.50p 2.57%
Barratt Developments (BDEV) 508.00p 2.36%
Associated British Foods (ABF) 2,499.00p 2.08%
Next (NXT) 3,934.00p 2.05%
Hammerson (HMSO) 565.50p 1.98%
United Utilities Group (UU.) 943.50p 1.89%
Severn Trent (SVT) 2,319.00p 1.89%

FTSE 100 - Fallers

BHP Billiton (BLT) 1,341.00p -3.42%
Glencore (GLEN) 310.20p -2.41%
Rio Tinto (RIO) 3,356.50p -2.29%
Hargreaves Lansdown (HL.) 1,355.00p -2.24%
Royal Dutch Shell 'A' (RDSA) 2,107.50p -2.16%
Royal Dutch Shell 'B' (RDSB) 2,200.50p -2.16%
Pearson (PSON) 653.00p -2.10%
London Stock Exchange Group (LSE) 3,081.00p -1.85%
Antofagasta (ANTO) 821.50p -1.73%
Anglo American (AAL) 1,312.50p -1.72%