Sector movers: Metals, oil producers' shares continue to tumble
Updated : 17:32
Metals, and oil and gas stocks continued to tumble in London, but the wider market appeared to be in much better shape on Thursday.
The blue chip FTSE 100 was up 0.63% or 42.70 at 6796.45 points. However, BP (down 1.07%), Fresnillo (down 1.03%) and Randgold Resources (down 0.49%) were indicative of declines in both the aforementioned sectors as volatility in the oil and metals market continued.
The headline metals and oil and gas producers’ stock indices fell 0.42% and 0.20% as three-month futures contracts of primary aluminium (down 0.5%), copper (down 1.3%), lead (down 1.7%) and nickel (down 2.7%) were all trading lower on the London Metals Exchange, while the oil markets digested news of a settlement on Iran.
While most in the industry reckon a flood of Iranian oil would not materialise over the short-term, analysts at Bank of America Merrill Lynch said the projected return of up to 0.7m barrels of the country’s over the next 12 months, would add downside pressure on forward oil prices of $5-$10 per barrel.
However, mining (up 2.06%) stocks responded positively to a sequence of writedowns, initially by BHP Billiton (up 1.50%) and later on Thursday by Anglo American (up 1.82%). Brokers Charles Stanley said the impairment charges were “no great surprise”.
“The bull argument for Anglo American is that things are so bad, they can only get better and that this is not discounted in the price, unlike, according to some, a dividend cut,” it added. It currently rates the stock at ‘reduce’.
Rio Tinto (up 1.12%) and Antofagasta (up 0.57%) were all trading higher along with a plethora of small to midcaps in the sector.
Meanwhile, potential investment opportunities in a sanction free Iranian oil and gas gave oilfield services companies (up 1.43%) a lift with blue chip Weir Group leading the pack rising 4.27% or 47p at 1135p.
Rival Petrofac also rose 2.91% or 26p to 920p to finish among the top 10 midcap risers.
Finally, food producers (up 1.46%), industrials (1.41%), banks (up 1.35%) and financial services (up 1.20%) as niggles still persist about how Greece and China pan out.