Sector movers: Natural resources stocks lead London market higher

Natural resource related stocks pushed the London market higher on Monday, following an uptick in oil and base metal prices.

The FTSE 100 ended up 2.76% or 168.94 points at 6,298.92, while the FTSE 250 closed 1.87% or 314.20 points higher at 17,110.28. Oil traders reversed some of the declines noted last week as reports suggested Russia had expressed a willingness to work with OPEC on the issue of cutting crude oil production.

At 1600 BST, the Brent front-month futures contract for November delivery was up 2.47% or $1.19 at $49.31 per barrel, reversing most of Friday’s declines. Concurrently, the WTI was up 2.02% or 92 cents $46.06 per barrel.

Meanwhile, selected base metal futures rose on the London Metal Exchange but declines in Asia meant a few continued to trade lower. Past the midway point of trading, LME’s three-month delivery contracts of primary aluminium (up 0.2%), copper (up 1.2%), nickel (up 0.2%) and tin (up 0.4%) were in positive territory, while lead (down 0.2%) and zinc (down 0.6%) futures were heading lower.

End result was a predictable rally in mining, metals, minerals and oil and gas stocks which heavily influence the fortunes of both London headline indices. Among the blue chips, Glencore (up 21.05%) led the FTSE 100 risers on reports the struggling mining company is in talks to sell its agricultural business. Singapore’s sovereign wealth fund, Japanese trading house Mitsui & Co. and a Canadian pension fund are among the parties who had expressed an interest in the unit, Bloomberg reported.

In another boost to the stock, head of Glencore Ivan Glasenberg said he believes copper prices should rise as more companies cut back mine production. Oil producers including Royal Dutch Shell, BP and BG Group, jumped on the oil price uptick, while Antofagasta responded to a better trading day for headline metal futures.

Risers on the FTSE 250 also came from the sector, with Kaz Minerals (up 13.90%), Premier Oil (up 12.14%), Petra Diamonds (up 8.48%) and Tullow Oil (up 8.30%) leading the way. However, Playtech (down 2.60%) was the standout midcap loser after the company said it has received a letter from the Central Bank of Ireland opposing its proposed takeover of Ava Trade.