Sector movers: Telcos, natural resources stocks lead London market lower

Telecommunications and natural resources stocks led the London market lower on Friday, ahead of the Greek bailout referendum on Sunday.

The blue chip FTSE 100 closed down 0.67% or 44.69 points at 6585.78 as the sell-off in mining stocks continued with base metals prices sliding yet again after a brief respite overnight. With US markets closed for the Fourth of July bank holiday weekend, traders looking for direction from Asia continued short calls on a whole plethora of base metals.

On the London Metal Exchange, the three-month contracts of primary aluminium (down 0.5%), copper (down 0.1%), lead (down 1.2%), nickel (down 0.6%), tin (down 2.2%) and zinc (down 0.1%) were all trading in the red invariably hitting mining stocks.

Blue chips Anglo American (down 1.66%), Antofagasta (down 0.37%), BHP Billiton (down 1.89%) and Rio Tinto (down 1.03%) were all in the red. Other notable names trading lower included Vedanta (down 1.26%), Fresnillo (down 0.73%) and Glencore (down 1.21%).

Reflecting the lack of confidence in China’s economic prospects and its lower importation of metals and minerals, Fidelity China Special Situations Investment Trust shed 3.42% or 5.20p to close at 146.80p to find its place among the day's biggest fallers.

With short callers all over oil benchmarks, both Brent and WTI traded lower causing a minor sell-off sending oil and gas shares into retreat. Tullow Oil (down 4.69%) and Premier Oil (down 3.41%) were among the biggest FTSE 250 fallers. Oilfield services companies were dragged lower by Hunting (down 4.98%) with rivals Petrofac (down 1.58%) and John Wood (down 0.62%) in attendance in bearish territory.

However, the biggest drop came in the telecommunications sector after UK regulator Ofcom fined mobile operator EE - due to be taken over by BT (down 0.54%) - £1m for failing to comply with its rules on handling customer complaints.

Meanwhile, Vodafone shares shed 2.03% after a negative note on the telecoms giant by Merrill Lynch, which told clients it felt the stock's recovery remained "fragile". Analysts cast doubts on the company's ability to compete with converged network operators and were sceptical about capital expenditure levels.