Sector movers: Resource stocks end torrid week in negative territory

Resource stocks, battered by the ongoing oil and metal prices slump, ended a torrid week firmly in negative territory dragging London’s headline indices lower still.

The FTSE 100 ended up 0.70% or 41.64 points lower at 5,912.44 on Friday, while the FTSE 250 closed down 0.35% or 59.56 points at 16,732.66. Oil futures went through another tepid session with gains in early morning calls followed by another round of declines, while gold shed some froth as traders booked profits on recent price rises.

At 1556 GMT, the Brent front-month oil futures contract was down 1.21% or 41 cents to $33.34 per barrel, while WTI was down 0.93% or 31 cents at $32.96 per barrel. Both benchmarks made marginal gains in Asian trading briefly recovering from historic 11-year lows, before yet another round of heavy shorting influenced by global oversupply perceptions weighed on proceedings in Europe.

Precious metals led by gold - on a high for much of the week on continual safe haven demand - also headed lower. COMEX gold futures contract for February delivery was down 0.51% or $5.70 at $1,102.10 an ounce, while spot gold in Dubai was down 0.43% or $4.76 at $1104.21 an ounce.

Selected base metals saw marginally positive trading on the London Metal Exchange. Primary aluminium (up 1.1%), nickel (up 0.1%), tin (up 0.7%) and zinc (up 1.0%) three-month delivery futures contracts headed higher at 1635 GMT. However, lead (down 0.3%) and copper (down 1.2%) contracts registered declines for much of the European session.

Unsurprisingly, Royal Dutch Shell (‘A’ shares down 5.47% / ‘B’ shares down 5.82%), Anglo American (down 4.76%) and BHP Billiton (down 3.21%) were the biggest fallers on the FTSE 100.

The midcap fallers’ roster also had resource linked companies on it with Tullow Oil (down 7.40%), Evraz (down 6.80%), Petrofac (down 5.66%) and Vedanta Resources (down 5.47%) among the biggest FTSE 250 fallers.

Away from resource stocks, Sports Direct (down 15.37%) ended up as the biggest blue chip faller after saying it is no longer confident of meeting its adjusted underlying core earnings target for the full year due to deteriorating trading conditions on the high street and unseasonal weather over Christmas.

However, supermarket leader Tesco (up 5.53%) jumped after Barclays upgraded the stock to ‘overweight’ from ‘equalweight’, saying the recent share price underperformance has left the supermarket’s valuation at attractive levels.

BAE Systems’ (up 2.77%) stock rose after RBC Capital Markets upgraded it from ‘outperform’ to ‘top pick’, and raising the target price from 570p to 630p.

EasyJet (up 2.64%) also took off after Moody's assigned an inaugural Baa1 long-term issuer rating to the budget airline with a ‘stable’ outlook.