Sector movers: Resource stocks hammered by commodities sell-off

A commodities market sell-off on Wednesday ensured resource stocks took a massive pounding with headline London indices ending the session in negative territory.

The FTSE 100 ended 3.46% or 203.22 points lower at 5,673.58, while the FTSE 250 fell 2.94% or 473.55 points at 15,641.01. Oil futures hit fresh record lows while base metals took a beating from short-sellers.

At 1713 GMT, the Brent front-month futures contract was down 4.76% or $1.37 to $27.39 per barrel, while WTI fell further and faster by 6.89% or $1.96 to $26.50 per barrel, as both benchmarks traded at fresh 12-year lows.

Base metals also headed lower on the London Metal Exchange. At 1635 GMT, three-month delivery futures contracts of primary aluminium (down 1.6%), copper (down 1.2%), lead (down 1.6%), zinc (down 2.2%) and nickel (down 0.9%) headed lower. However, tin futures avoided the broader sell-off heading higher by 0.6%, benefitting from production cutbacks in China.

Wider market volatility sent investors scurrying for the safe haven comfort of precious metals with gold futures rallying. On the COMEX, the front-month gold contract posted a rise of 1.43% or $15.60 to $1,104.70 an ounce, while spot gold was 1.93% or $21.01 higher at $1,104.70 an ounce.

Invariably, Randgold Resources (up 3.47%) ended up as one of only two FTSE 100 stocks to close the session in positive territory, with retailer Sports Direct (up 2.31%) being the other. However, resource stocks endured a torrid session with Glencore (down 9.85%) leading the blue chip fallers.

Anglo American (down 7.43%), BHP Billiton (down 7.37%) and Royal Dutch Shell (‘A’ shares down 7.25%/‘B’ shares down 6.72%) were also in close attendance. Concurrently, Amec Foster Wheeler (down 9.33%), Morgan Advanced Materials (down 8.21%), Nostrum Oil & Gas (down 7.89%) and Tullow Oil (down 7.66%) suffered major losses on the FTSE 250.

Elsewhere, retailer WH Smith (up 5.79%) jumped after saying sales from its shops at airports and train stations were up 5% in the 20 weeks to 16 January although High Street sales were flat over the period.

Pets at Home (up 4.85%) rose after posting slightly better-than-expected sales for the third quarter, along with a rise in total revenue growth.

However, JD Wetherspoons (down 9.71%) plunged after saying operating margins would fall in the first 12 weeks of the second quarter compared to the same period last year due to increased labour costs. Chairman Tim Martin warned that his current view was that profits for this year were "likely to be towards the lower end of analysts' expectations".