Sector movers: Antofagasta crushed after company abandons dividend

Miners came under renewed selling pressure as iron ore futures continued to come off the boil and ahead of the US central bank's policy meeting the next day, with the Bank of Japan's decision overnight to keep its policy settings unchanged - instead of delivering further stimulus - and weak US data weighing further on sentiment.

Weak results from copper mining outfit Antofagasta did little to buoy sentiment in the space.

Retail sales data in the States referencing the month of February led some economists to pare their estimates for economy-wide levels of household consumption in the first quarter of the year.

Excluding sales of automobiles and gasoline, what analysts refer to as the 'control-group' which is included in the Department of Commerce's quarterly estimates of GDP growth, retail sales were flat month-on-month (consensus: 0.2%) while the previous month's rise was revised lower by four tenth of a percentage point to 0.2%.

That led analysts at Pantheon Macroeconomics to revise down their forecast for first quarter consumption Stateside from 3.0% to 2.5%.

Nonetheless, the think-tank said it remained to be seen whether spending had simply taken a hit from the volatility in capital markets at the start of the year, in which case a bounce in spending come March was possible.

Three-month copper futures slid just 0.3% by the close of trading to $4,933.00 per metric tonne on the LME.

Iron ore futures fared far worse, dropping 4.8% by the close of trading to $63.47 a tonne on the Dalian Commodities Exchange after hitting their best level since January in the previous session.

Data released on 12 march revealed that Chinese crude steel output fell by 5.7% year-on-year in the first two months of 2016.

At the company level, Antofagasta led the retreat, with the day's losses on its shares dwarfing those of its peers. The copper mining outfit, named after the region in Chile where many of its major mines are located, saw its stock tank 10.81% to 488.10p.

On Tuesday, Antofagasta abandoned its final dividend and reported to Shareholders that its annual profits had nearly gone up in smoke, shrinking by 99%.

Banks led on the upside, with upgrades from analysts at Goldman Sachs stoking interest in shares of RBS and challenger bank Shawbrook.

Regarding the still mostly state-owned lender, Goldman argued the 'valuation gap' between its shares and those of rival Lloyd's was likely to close as RBS continued running-down its legacy assets and as it pursued an aggressive strategy in the UK mortgage market.

RBS stock was on a price-to-tangible book value ratio of 0.65 versus 1.34 for its competitor.

Shares in Shawbrook were boosted by the broker's decision to upgrade its recommendation to a 'buy' (and lift its target from 380p to 410p).

Goldman believed markets had gone too far in pricing-in the negative impact from possible moves from authorities, the Financial Policy Committee in particular, to reign in the buy-to-let market in Britain.

"We believe Shawbrook’s current valuation (c.1.5x 2017E TBV for c.24% 2018E ROTE), implies a significant negative impact from buy-to-let. Given: (1) the ability to re-allocate capital not used to grow in buy-to-let elsewhere; and (2) the group’s focus on professional landlords, we believe this outcome is unlikely," Nick Baker and Martin Leitgeb said in a research note sent to clients.