Sector movers: Mining and oil stocks drop as ECB holds off on stimulus

Cyclical sectors such as mining and oil were the worst performers of the day on Thursday as the wider stock market weakened in the absence of stimulus measures from the European Central Bank (ECB).

The ECB held off from making a move at its meeting, saying instead that it would look at injecting stimulus early next year in response to downward pressures on inflation and weak economic growth.

The FTSE 100 dropped into the red following the decision and subsequent press conference with ECB president Mario Draghi with resource stocks bearing the brunt of the selling pressure.

Mining peers Anglo American, Rio Tinto, Antofagasta, Fresnillo and BHP Billiton were among the heaviest fallers on the blue-chip index in afternoon trade.

"The markets were simply disappointed that the job of fighting deflation had been passed off to next year," said analyst Craig Erlam from Alpari. "We may not have expected quantitative easing today but the least we wanted was a strong sign that it is to come and Draghi was very non-committal."

The energy sector was also weak as shares tracked oil prices lower, with Tullow Oil, BP and BG Group registering losses.

North Sea oil peers Enquest and Premier Oil were also falling on the FTSE 250 after Wednesday's Autumn Statement, with some underwhelmed by the move by George Osborne to cut the supplementary charge on oil producers' profits.

The levy, which was reduced from 32% to 30%, only goes some way to reverse the substantial 12 percentage-point increase in the rate introduced by Osborne in his 2011 Budget.

Crude was lower on Thursday as oil continued to fluctuate below $70 a barrel in the aftermath of last week's decision by OPEC to keep output unchanged despite a supply glut. West Texas Intermediate was down 1.3% at $66.49 a barrel, while Brent declined 0.8% to $69.35. Both dropped 18% in November.

Jade Fu, investment manager at Heartwood Investment Management, highlighted "pockets of vulnerabilities in certain areas of the market" after the recent plunge in oil prices, namely the energy sector which is at risk of "declining profitability and the potential for corporate defaults".

She said: "Going into 2015, we are watching the impact of lower energy prices carefully. In managing risk, we have avoided the commodity sector this year and hold an 'underweight' to energy stocks within our UK equity exposure."

Top performing sectors so far today
Software & Computer Services 1,242.69 +2.53%
Industrial Transportation 2,663.13 +1.60%
Industrial Engineering 8,583.89 +1.21%
Household Goods & Home Construction 12,493.37 +1.18%
Personal Goods 25,303.97 +1.17%

Bottom performing sectors so far today
Industrial Metals & Mining 1,382.18 -2.54%
Oil Equipment, Services & Distribution 17,421.74 -2.16%
Mining 14,760.27 -1.93%
Oil & Gas Producers 7,251.83 -1.87%
Food & Drug Retailers 2,719.17 -1.29%