Sector movers: Resource stocks end lower on oil market rout
Updated : 18:19
Resource stocks ended lower on Friday, as oil futures tumbled to a seven-year low.
Both major indices stayed in negative territory. The FTSE 100 closed 2.22% or 135.27 points lower at 5952.78, while the FTSE 250 ended 1.19% or 202.96 points lower at 16,877.29.
Oil futures registered further declines with Brent slipping to a seven-year low, after the International Energy Agency (IEA) suggested a demand correction was likely next year.
In its assessment of the market, the IEA said oil demand in the current quarter was growing by 1.3m barrels a day (bpd), down from 2.2m bpd barrels in the previous quarter. The agency also predicted that demand growth will slip back to 1.2m bpd next year.
With OPEC confirming its production for November stood at 31.7m bpd, well above its published quota of 30m bpd, Brent slipped to $38.53 per barrel, down 3.02% or $1.20 at 1604 GMT, its lowest level since December 2008. Concurrently, WTI was down 2.26% or 83 cents $35.93 per barrel.
Away from the oil market, most metal futures headed higher during late afternoon trading in Europe. At 1635 GMT, three-month delivery contracts of primary aluminium (up 0.1%), tin (up 0.1%), lead (up 2.0%) and zinc (up 1.8%) were trading higher on the London Metal Exchange. The copper contract, still at historic lows, remained under pressure trading at $4,712.50 per metric tonne, up 2.7%.
Gentle uptick in metal prices could not keep resource blue chip stocks in the positive territory with Anglo American (down 8.07%) and BHP Billiton (down 5.32%) reflecting the mood of the commodities market. The oil price slump took its toll on FTSE 100 peers BG Group (down 5.10%) and Royal Dutch Shell ‘B’ shares (down 4.79%).
Midcaps narrated a similar tale of woe with Premier Oil (down 13.65%) dragging the FTSE 250 lower, with sector rival Tullow Oil (down 9.88%).
However, Fresnillo (up 0.30%) just about bucked the wider resource sector dip ending among only three FTSE 100 risers for the session. Merlin Entertainment (up 0.60%) and Admiral Group (up 0.31%) were the other two on a very short list of FTSE 100 risers.