Sector movers: Blue chips falter as resource stocks see mixed fortunes

Midcap and blue chip indices saw contrasting fortunes, as natural resource stocks ended the session on a mixed patch.

The FTSE 100 closed 0.30% or 19.06 points lower at 6,356.09, while the FTSE 250 ended up 0.90% or 155.60 points higher at 17,420.70 with oil benchmarks on a positive footing along with selected metal futures.

At 1700 GMT, the Brent front-month futures contract was up 0.96% or 43 cents to $45.29 per barrel. Meanwhile, WTI was 1.53% or 64 cents higher at $41.99 per barrel, as both benchmarks registered gains with traders placing speculative bets on the off-chance that the conclusion of the OPEC Ministers’ Summit in Vienna, Austria on 4 December might see a quota cut.

Meanwhile, selected metal futures registered gains in late afternoon trading in Europe. At 1635 GMT, three-month delivery contracts of lead (up 1.4%), nickel (up 1.1%) and zinc (up 0.3%) saw decent upticks on the London Metal Exchange. However, primary aluminium (down 0.7%) and tin (down 0.8%) traded lower.

The copper contract, still at historic lows, registered a 0.3% uptick to $4,592.00 per metric tonne as Chinese copper producers agreed over the weekend to cut refined production by 200,000 metric tonnes in 2016. Additionally, in Zambia, Konkola Mines announced “mothballing” of its Nchanga mine.

Glencore (up 5.26%) led the blue chips higher, and Antofagasta (up 2.17%) also saw decent gains. However, BHP Billiton (down 3.05%) was under pressure after it emerged that Brazilian authorities will demand £3.5bn from the miner, Vale and their Samarco joint venture for the tailings dam burst on 5 November.

The company confirmed that the Brazilian Federal Government and state governments intend to commence legal proceedings against the Samarco joint venture and its two owners for clean-up costs and damages. BHP Billiton, which recently refuted claims that waste from the burst dam were toxic, said it has not received formal notice of the action at this stage.

Aberdeen Asset Management (down 4.60%) declined as the investment management group said full year underlying pre-tax profits rose only slightly to £491m from £490m due to the slump in Asian and emerging market equities. Continuing with finance and banking stocks, Royal Bank of Scotland (down 1.36%) also traded lower.

On the FTSE 250, Evraz (up 4.90%) and Petra Diamonds (up 10.13%) sparkled. However, Drax Group (down 3.80%) and Premier Oil (down 3.33%) headed the other way.