Sector movers: Metals slump drags miners lower, oil stocks up in London

Another decline in industrial metals futures dragged London-listed miners lower on Thursday, but oil and gas stocks were up on Royal Dutch Shell beating analysts’ forecasts.

The FTSE 100 closed up 37.87 points or 0.57% at 6668.87, while the FTSE 250 just about managed to close in positive territory by 8.19 points or 0.05% at 17521, with miners weighing on the latter.

In another torrid day for the metals and minerals market, three-month contracts of primary aluminium (down 0.8%), copper (down 1.2%), lead (down 1.0%), nickel (down 1.9%), tin (down 1.5%) and zinc (down 1.1%) were all trading lower on the London Metal Exchange.

Predictably, short-sellers were all over affected mining stocks. Vedanta Resources (down 3.39%) and Lonmin (down 3.24%) were among the biggest FTSE 250 fallers, weighing heavily on the broader index performance.

After a short-lived recovery, blue chip miners Anglo American (down 0.95%), Antofagasta (down 0.77%) and Fresnillo (broadly flat) slipped lower but BHP Billiton and Rio Tinto stayed marginally in positive territory.

Going the other way, oil and gas stocks bounced back to lead the market on close with Royal Dutch Shell (‘A’ shares up 4.22%) beating consensus forecasts as crude prices rose on overnight declines in US oil stockpiles by 4.2m.

Shell revealed 6,500 job cuts, following a 35% decline in quarterly profit and warned about the oil price slump lasting "several years". However, adjusted profits of $3.8bn from the Anglo-Dutch giant, though down on an annualised basis, beat analysts' consensus estimate of $3.4bn soundly.

The oil major also kept its dividend steady at $0.47 for ordinary shares and $0.94 per American depositary share. Furthermore, Shell said it expects $30bn of asset sales between 2016 and 2018, on top of a total of $20bn in disposals for 2014 and 2015 combined.

Blue chip peers BG Group (up 3.82%) and BP (up 0.60%) were also in positive territory with a plethora of mid to small caps in the sector including Tullow Oil (up 4.71%) and Melrose Resources (up 7.69%) worthy of a mention.

However, on the downside, Babcock International (down 5.15%) slipped into the red despite saying it remains on track to meet if full- and half-year forecasts. The company said its order book remained stable at the £20bn seen in mid-May, with 84% of revenue for the full year and 60% of revenue for 2016-17 in place.

British Gas owner Centrica (down 3.13%) was also under the cosh after announcing 4,000 job cuts as a result of a strategic review, despite posting a near doubling of its first-half profits.