Sector Movers: Miners, oil stocks get breathing room as commodities recover

Uptick in mining, metals and oil and gas stocks pulled the London market higher on Thursday, as China’s stimulus and positive US data lifted sentiment.

The FTSE 100 was up 3.56% or 212.83 points to 6,192.03, while the FTSE 250 was up 1.93% or 320.64 points at 16,921.95, as US GDP expanded by an annualised 3.7% in the three months to June, compared with an initial estimate of 2.3% and ahead of analysts’ expectations calling for a 3.2% increase.

Meanwhile, US businesses increased investment at a 3.2% clip compared to an initial estimate of a 0.6% decline, as spending on structures such as office buildings was revised to show growth of 3.1% instead of a 1.6% drop.

Both Brent and WTI responded in kind. By 1607 BST, the Brent front month futures contract had rallied 7.19% or $3.10 to $46.24 per barrel, while the WTI was up 7.07% or $2.73 to $41.33 per barrel.

Base metals also bounced back in European trading despite fragile trading sentiment. Past the midway point of trading on the London Metal Exchange, three-month futures contracts of primary aluminium (up 0.7%), copper (up 1.4%), lead (up 0.7%), nickel (up 2.6%) and zinc (up 1.6%) were all trading higher.

Invariably, miners and oil stocks led the gains. Anglo American led the blue chips closing 9.33% or 62p higher at 726.30p, with BHP Billiton (up 9.21%), Antofagasta (up 8.90%) and Rio Tinto (up 6.77%) in close attendance.

For the FTSE 250, oil-related stocks Hunting (up13.26%), Tullow Oil (up 8.26%), Premier Oil (up 8.16%) and Petrofac (up 7.49%) led the way. However, Lonmin (down 4.18%) continued to suffer along with Petra Diamonds (down 3.25%)

Asia-focussed bank Standard Chartered (up 7.03%) also returned to positive territory among the FTSE 100 gainers, as the People’s Bank of China on Wednesday announced it would pump 140bn yuan of stimulus into the economy a day after cutting interest rates, the deposit facility and the reserve rate ratio.