Sector Movers: Fresh oil slump weighs on resource stocks

Resource stocks, with the notable exception of gold miners, registered declines on Friday as both London indices ended the week on a negative note.

At the close of market proceedings, the FTSE 100 ended 0.36% or 21.72 points lower at 5950.23, while the FTSE 250 ended 0.12% or 18.69 points higher at 16,158.06.

Oil futures headed lower, after gains seen over previous sessions, premised on a call by major producers to freeze production, were overwhelmed by renewed oversupply concerns.

With Iran still not clarifying its stance on whether or not it would back a Saudi-Russian production ‘freeze’ initiative, and both Saudi Arabia and Russia saying that they might freeze but not cut output, Brent and WTI front-month futures tumbled.

Meanwhile data from the US Energy Information Administration on Thursday showed the country's crude oil inventories rose by 2.1m barrels last week to a peak of 504.1m barrels. It marked the third week of record highs in the past month and added to concerns about the global oversupply.

At 1623 GMT, the Brent front-month oil futures contract was down 3.68% or $1.26 at $33.02 per barrel, while WTI was down 4.52% or $1.39 at $29.38 per barrel.

Meanwhile, precious metals stayed on positive turf extending the previous session’s gains. The COMEX front-month gold futures contract was up 0.42% or $5.10 at $1,231.40 an ounce, while spot gold was up 1.18% or 10 cents to $1,232.40 an ounce.

Spot platinum rose 0.49% or $4.64 to $949.39 an ounce, but COMEX silver fell 0.21% or three cents to $15.40 an ounce.

With the exception of lead (down 0.2%), headline three-month base metal futures stayed in positive territory on the London Metal Exchange. At 1635 GMT, tin (up 1.3%), nickel (up 1.5%), copper (up 0.1%) and primary aluminium (up 2.2%) were all in the green zone.

Predictably, gold miner Fresnillo (up 3.59%) led the FTSE 100 gainers, with Randgold Resources (up 2.50%) not far behind. On the FTSE 250, Centamin (up 5.61%) led the risers, however Tullow Oil (down 5.77%), Evraz (down 5.18%), Vedanta Resources (down 4.94%) and Ophir Energy (down 4.36%) were among the biggest midcap fallers of the session.

Oilfield services firms Amec Foster Wheeler (down 4.06%) and Wood Group (down 3.71%) also registered substantial declines.

Moving away from resource stocks, Invidior (down 9.65%) was the biggest faller across the main market, a day after it said profits and sales fell by less than expected as the speciality pharmaceuticals business completed an encouraging first year as a public company since being demerged from Reckitt Benckiser.

Elsewhere, Sports Direct headed lower after Jefferies called on founder Mike Ashley to take the company private. The bank suggested Ashley use £400m of his own money and £1bn in loans to buy out investors holding the remaining 45% of the retailer.

On a more positive note, Essentra (up 9.12%) rallied after the plastic and fibre products firm saw full year revenue rise 27% on a constant currency to £1.1bn.

Finally, shares in Coca-Cola HBC (up 2.84%) rose after the company reported an increase in full year volumes and earnings despite foreign exchange having an adverse impact on revenues.