Sector Movers: Oil, metals uptick sends resource stocks higher

A commodities market uptick on Thursday ensured resource stocks took a turn for the better with headline London indices ending the session in positive territory.

The FTSE 100 ended 1.77% or 100.21 points higher at 5,773.79, while the FTSE 250 ended 1.23% or 192.55 points higher at 15,833.56. Oil futures reversed declining fortunes posting an uptick in wake of US inventory data.

US commercial crude oil inventories increased by 4m barrels during the week ending on 15 January, according to the Energy Information Administration, the statistical arm of the country's Department of Energy. Despite the increase, traders were encouraged that stockpiles at the oil delivery hub of Cushing, Oklahoma, rose by only 191,000 barrels; a figure below levels many market commentators had feared.

Gasoline stockpiles jumped by another 4.6m barrels, although those of other products such as distillates slipped by 1m barrels. Imports of oil fell by 409,000 barrels a day in the latest week, the EIA added.

In response, the WTI front-month futures contract regained its premium to global proxy benchmark Brent. At 1718 GMT, Brent was up 6.06% or $1.69 to $29.57 per barrel, while WTI rose 5.54% or $1.57 to $29.92 per barrel. Despite a positive session, both benchmarks remain within range of 12-years lows.

Elsewhere, selected base metals headed higher on the London Metal Exchange. At 1635 GMT, three-month delivery futures contracts of primary aluminium (up 0.1%), copper (up 1.1%), lead (up 1.2%), nickel (up 0.9%) and zinc (up 0.7%) headed higher.

Glencore (up 15.52%), Anglo American (up 12.19%), BHP Billiton (up 10.66%) and Rio Tinto (up 5.99%) were among the FTSE 100 gainers, while Tullow Oil (up 9.31%), Amec Foster Wheeler (up 8.62%) and Acacia Mining (up 8.53%) led FTSE 250 leaders’ charge.

Away from resource stocks, Pearson (up 17.41%) was highest placed blue chip stock after warning that its full-year profit would be below forecasts as it undergoes fresh restructuring.

Royal Mail edged higher after reporting a strong Christmas period, with UK parcel volumes in December 6% better than the year before, and saying it was on track to snip UK parcel costs by at least 1% for the full year.

Elsewhere, Halfords (up 12.43%) pedalled to the front of the peloton after it said group like-for-like sales rose 0.3% in the third quarter with the company reporting that full year pre-tax profit expectations would be unchanged.

Continuing with retail, clothing chain N Brown rocketed as it posted a jump in third quarter revenue and said it was on track to meet full year expectations.