Sector Movers: Resource, financial stocks drag London market lower

Resource and financial stocks got a hammering on Tuesday, dragging the London market back into negative territory.

The FTSE 100 closed 1.25% or 75.42 points lower at 5,962.31, while the FTSE 250 ended 0.37% or 59.60 points lower at 16,229.20. Oil futures resumed their slide as Saudi Oil Minister Ali Al-Naimi said there was no prospect of production cuts.

Speaking at IHS CERA Week in Houston, USA, Al-Naimi restated his country’s case for “maintaining output” premised on demand picking up excess crude over the medium-term.

Meanwhile, Nigeria has suggested it would be in favour of an oil production freeze initiative put forward by Saudi Arabia, Russia, Venezuela and Qatar last week but Iran described the idea as "ridiculous" after initially having welcomed the move.

At 1915 GMT, the Brent April futures contract was down 3.30% or $1.13 to $33.56 per barrel, while WTI was 3.7% or $1.25 lower at $32.14 per barrel.

Meanwhile, precious metals regained momentum. The COMEX front-month gold futures contract was up 1.01% or $12.20 at $1,222.30 an ounce, while spot gold was up 1.16% or $14.02 cents to $1,222.65 an ounce. Spot platinum rose 1.48% or $13.75 to $941.83 an ounce, and COMEX silver rose 0.42% or six cents to $15.29 an ounce.

Headline base metal futures headed lower on the London Metal Exchange, with the notable exception of tin (up 1.6%). At 1635 GMT, three-month futures contracts of nickel (down 1.6%), copper (down 1.3%), primary aluminium (down 1.7%) and lead (down 1.8%) headed lower.

Predictably, gold miners rallied with Randgold resources (up 2.35%) among the biggest FTSE 100 gainers. Asia-focussed Standard Chartered (down 6.73%) bank and Aberdeen Asset Management (down 5.01%) were among the biggest blue chip fallers.

Anglo American (down 6.34%) and BHP Billiton (down 6.05%) were also on the FTSE 100 fallers roster, while Vedanta Resources (down 3.91%) was the biggest resource sector faller on the FTSE 250.

Drax (down 7.78%) was the biggest FTSE 250 faller overall as it revealed a drop in full year earnings before interest, tax, depreciation and amortisation to £169m in 2015 from £229m a year earlier amid severe market deterioration and difficult regulatory challenges.

On the upside, selected blue chip housebuilding stocks reversed declines after Persimmon reported a 34% increase in full year underlying profit before tax to £637m, as revenues rose 13% to £2.9bn, driven by a gain in the average selling price and a jump in legal completions.

However, the story of the session belonged to the London Stock Exchange (up 13.71%). Its shares surged after the company confirmed talks with Deutsche Boerse about a potential merger of equals of the two businesses.