Sector Movers: Resource stocks see mixed fortunes

Resource stocks saw mixed fortunes on Monday, as oil markets endured volatility but both headline London indices ended the session marginally in positive territory.

At the close of proceedings, the FTSE 100 closed 0.30% or 18.67 points higher at 6164.72, while the FTSE 250 ended a mere 0.01% or 1.96 points higher at 16,845.64. Negative impact of the ongoing war of words between Iran and Saudi Arabia spilled over into the new trading week.

Iranian oil minister Bijan Zanganeh told the Mehr News Agency over the weekend that Tehran would continue increasing its production and exports. His remarks came ahead of an oil producers conference in Doha on 17 April that Iran has decided not to attend.

On Friday, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman told Bloomberg: “If all countries agree to freeze production, we will be among them.”

But added that Iran needed to be among those countries “without a doubt”, raising fears of oversupply and an escalation of the tussle for oil market share between the Saudis and Iranians.

Meanwhile, a Reuters survey published last week indicated that OPEC’s oil production rose in March, having stabilised in February, following higher production from Iran and near-record exports from southern Iraq. Iraq alone produced over 4m barrels per day, second only to Saudi Arabia among all of OPEC's 13 member nations.

At 1707 BST, the Brent front month futures contract was 0.88% or 34 cents lower at a three-week low of $38.33 per barrel, having registered marginal gains earlier in the Asian session. Concurrently, WTI futures, fell 0.46% or 17 cents to $36.62 per barrel.

Away from oil markets, precious metals also headed lower despite the dollar weakening considerably against the yen. The COMEX gold June futures contract fell 0.23% or $2.80 to $1220.70 an ounce, while spot gold was down 0.48% or $5.85 to $1,216.75 an ounce.

COMEX silver fell 0.24% or four cents to $15.01 an ounce, while spot platinum also slid 1.56% or $14.95 to $942.10 an ounce; retreating further from the psychological $1,000 an ounce level.

Headline base metal futures saw lacklustre trading across the London Metal Exchange board, marked by low volumes with China and Hong Kong closed for business. At 1635 BST, the primary aluminium (+0.7%) three-month futures contract appeared to be among the few in positive territory.

Reflecting the tumultuous commodities market, resource stocks saw differing fortunes. Anglo American (+1.69%) and Rio Tinto (+1.67%) were among the FTSE 100 gainers, with the former also benefitting from entering into a sale and purchase agreement to offload its 70% interest in the Foxleigh metallurgical coal mine in Queensland, Australia.

However, Antofagasta (-2.14%) and Fresnillo (-1.89%) ended up among the biggest blue chip fallers.

Kaz Minerals (-4.08%) and Acacia Mining (-3.39%) also registered sizable declines to end trading among the biggest FTSE 250 fallers.

Away from resource stocks, story of the session belonged to Mondi, which ended 2.52% lower after the packaging and paper group said Russian authorities are investigating its Mondi Syktyvkar business on claims it violated anti-monopoly laws in regards to pricing of offset paper.

Elsewhere, Mediclinic International (+3.40%) and Shire (+2.89%) ended the session as the biggest FTSE 100 gainers, while Ocado (+8.65%) ended as the highest FTSE 250 stock after the Daily Telegraph reported the company could be on the verge of agreeing to a technology deal with an international retailer.