Sector Movers: Resource stocks recover but financials suffer

Resource stocks saw an uptick on Monday, but financial stocks and market data conspired to drag headline London indices lower.

The FTSE 100 closed 2.71% or 158.70 points lower at 5689.36, while the FTSE 250 ended 3.15% of 504.29 points lower at 15497.99. Gold spiked on 'safe haven' demand, while oil futures started yet another trading week on a negative footing.

At 1704 GMT, COMEX gold futures contract for April delivery rose 3.22% or $37.30 to $1,195.00 an ounce, while spot gold was 1.65% or $19.32 higher at $1,192.72 an ounce, as turmoil in the equities market sent investors flocking to seek safety of the yellow metal.

COMEX silver futures rose 3.74% or 55 cents to $15.33 an ounce, while spot platinum rose 1.48% or $13.45 to $925.05 an ounce. Selected base metal contracts posted gains across the London Metal Exchange board, but the much scrutinised three-month copper delivery futures contract was down 0.2% to $4,637.50 per metric tonne at 1635 GMT.

Concurrently, primary aluminium (up 0.7%), zinc (up 2.7%), lead (up 1.8%), tin (up 2.8%) futures saw decent upticks, but the nickel (down 0.2%) contract joined copper in posting a marginal decline.

Meanwhile, oil futures slid further with substantial chatter about coordinated production cuts by OPEC and non-OPEC producers, but very little to show for it. The Brent front-month futures contract was down 1.56% or 53 cents to $33.53 per barrel, while WTI was 2.07% or 64 cents lower at $30.25 per barrel.

Invariably, Randgold Resources (up 13.21%) led the session’s gainers. More so, after it lifted its dividend and reported record production for 2015 despite a drop in profit. Production and costs were in line with the company's annual guidance, as it set a new production record of more than 1.2m ounces - up 6% on the previous year.

The firm reported strong cash flows from operations, boosting cash on hand by 158% to $213.4m, though profits for the year were down due to lower gold prices - to $212.8m from $271.2m a year earlier. Nevertheless, Randgold's board proposed a 10% increase in the annual dividend, which it said reflected the strong cash flows generated by the business.

Other miners, Frensillo (up 7.80%), Anglo American (up 3.51%), Antofagasta (1.59%) and Rio Tinto (up 1.24%) joined Randgold Resources in completing the five biggest FTSE 100 gainers, while Centamin (up 7.34%) and Acacia Mining (up 3.52%) led the FTSE 100 charge.

Among financial stocks, Worldpay (down 8.68%) and Hargreaves Lansdown (down 7.62%) endured a torrid session. Shares in broadcaster ITV fell before recovering ground as Deutsche Bank said the broadcaster was lagging the rest of the sector, which has kicked the year off strongly.

Meanwhile, John Wood Group was under the cosh after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral', while Amec Foster Wheeler was also lower after Nomura cut it to ‘neutral’ from ‘buy’.

Finally, Rolls-Royce shares were under pressure amid reports management of the aerospace and defence group will cut the dividend this week for the first time in 25 years. The company, which has issued five profit warnings in the last two years, announced a “major restructuring” in November aimed at saving between £150m and £200m per year from 2017.