Sector movers: Mining stocks clobbered by weak Chinese data

Mining stocks took a tumble on Monday following weak macroeconomic data from China, just as tensions in the Middle East spooked investors across the board.

The FTSE 100 ended 2.39% or 148.89 points lower at 6,093.43 points, while the FTSE 250 finished 1.77% or 307.67 points lower at 17,122.15 amid growing tensions between Iran and Saudi Arabia over the execution of a prominent Shia cleric Sheikh Nimr al-Nimr by the latter.

There was further bad news, as base metal futures fell across the London Metal Exchange board following declines in Asia on weak data from China. Factory activity in Asia’s largest economy slowed down in December, mainly as a result of weakness overseas, but analysts pointed to improvements in local conditions as reasons for optimism.

Caixin’s ‘unofficial’ manufacturing sector purchasing managers’ index for December retreated from a reading of 48.6 for November to 48.2 in December. The median estimate from analysts was for a reading of 48.9.

Unsurprisingly, three-month delivery contracts of primary aluminium (down 3.1%), copper (down 2.2%), nickel (down 3.4%), lead (down 1.9%), zinc (down 2.5%) and tin (down 1.2%) headed lower weighing on Anglo American (down 7.21%), Glencore (down 5.76%) and Antofagasta (down 5.03%).

However, COMEX gold futures for February delivery rallied on safe haven demand up 1.66% or $17.60 to $1077.80 an ounce, while spot gold was 1.35% or $14.30 higher at $1075.40 at 1607 GMT. COMEX silver also rose 0.74% or 10 cents to $13.91 an ounce, ensuring Fresnillo (up 0.21%) and Randgold Resources (up 2.41%) stayed in positive territory, ending the session as the only gainers on the FTSE 100.

Away from resource stocks, insurance companies RSA Insurance, Direct Line and Aviva slumped after UBS estimated net losses of £150m to £308m from the damage of storms Desmond, Eva and Frank.

Diageo was sitting lower after it completed the sale of its major wine interests, including US-based Chateau and Estate Wines and the UK-based Percy Fox arm, to Treasury Wine Estates.

Grainger edged higher after saying it had exchanged contracts with Turbo Group Holdings to sell its Retirement Solutions business on or before 20 May, subject to Turbo gaining approval from the Financial Conduct Authority. Grainger expects a £55m profit on the sale of its equity release division.