Sector movers: Antofagasta leads miners lower on weak China data, metal prices

Falling metal prices, subdued risk appetite and weak Chinese economic data were weighing on mining stocks on Wednesday, with Antofagasta among the worst performers.

A surge in the dollar on increased speculation about a sooner-than-expected rate rise in the States has dampened commodity prices over recent sessions, making assets such as gold less attractive as an investment.

Gold, silver, copper and platinum prices were all trading with heavy losses on Wednesday.

"The dollar at 12-year highs versus multiple major currencies and US, UK and German equities at all-time highs create unease about holding on through market dips on the fear it could finally be the top," said analyst Jasper Lawler from CMC Markets.

Meanwhile, a raft of disappointing economic indicators from China added to concerns about a slowdown in the world's top metals consumer, hitting the outlook for demand in the mining sector.

Figures released overnight revealed that fixed asset investment, retail sales and industrial production all grew less than expected in February, with the latter coming in at its slowest pace in nearly six years.

Blue-chip miners such as Antofagasta, Glencore, Fresnillo, Anglo American and BHP Billiton were all trading in the red by the afternoon.

Antofagasta was the heaviest faller, down 2.3%, as sentiment continues to be dampened by social unrest and court cases affecting its flagship Los Pelambres copper project in Chile.

The miner revealed on Tuesday that a court has ruled it must destroy at least part of its tailings dam wall at the mine as work is disturbing the normal flow and quality of a nearby river. At the same time, protests by locals seeking action to help alleviate current drought conditions have been going on for the last two weeks and have so far resulted in 5,000 tones of lost copper production.

Goldman Sachs reiterated its 'sell' recommendation on the stock on Wednesday, saying it has a premium valuation and limited growth potential.

The bank said that while Antofagasta is to appeal the court ruling and will likely succeed - given previous appeals have gone in its favour in the past - "this could result in an additional cost to the company, as additional work might be required to ensure normal flow and quality of the water to the local town".

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