Sector movers: Mining and metals shares see mixed fortunes

Mining and metals stocks saw mixed fortunes on Monday as the London market ended marginally lower.

The FTSE 100 fell 0.54% or 33.17 points to 6,084.59, while the FTSE 250 was down 0.25% or 42.71 points at 16,925.69, as base metal futures tumbled on the London Metal Exchange yet again, and related stocks struggled.

Excepting tin (up 0.4%), most base metal futures were sharply lower on the London Metal Exchange yet again, with some contracts extending losses seen on Friday.

Past the midway point of trading on the LME, three-month delivery contracts of primary aluminium (down 1.0%), copper (down 0.6%), lead (down 2.0%), nickel (down 2.4%) and zinc (down 2.1%) were in all negative territory.

Glencore (down 4.41%) and Antofagasta (down 2.47%) led the FTSE100 lower, but on the other hand BHP Billiton (up 1.04%) was among the leading blue chip risers. FTSE 250 risers and fallers also had mining and metals stocks at both ends.

Lonmin (down 6.00%) continued to suffer as lower global car sales for August sent platinum group metals lower. Spot platinum was down 1.64% or $15.95 to $953.90 an ounce, as car sales data for August came in 1.0% lower year-on-year, slightly more than the 0.8% fall seen in July.

Kaz Minerals (down 5.62%) was also among the biggest midcap fallers while Acacia Mining (up 3.05%) and Evraz (up 2.98%) were among the risers.

David Madden, analyst at IG, said, “The collapse in commodity markets has the macroeconomic environment looking dreary, and investors can’t help but feel cagey. Mining and energy companies are keeping the FTSE 100 under the cosh, and given the deceleration of the mineral-hungry economies, it is a theme that will be around for a while."

Meanwhile, Morrisons (down 4.48%) extended losses from last Friday, as retail stocks fell on negative British Retail Consortium data for August. M&S (down 2.42%) was also among the biggest blue chip fallers.

However, on a positive note, shares in International Consolidated Airlines Group (up 1.20%) rose after the British Airways owner received a boost from Credit Suisse.

The investment bank said things were looking up for up for IAG shares in 2016 given improved pricing on its Transatlantic routes, the pricing behaviour within the sector in general and the stock’s then current valuation.