Sector movers: Resource stocks shrug off base metal price drop

Resource blue chips headed higher on Thursday, despite a decline in base metal prices but headline London indices still ended the session in negative territory.

The FTSE 100 closed 0.46% or 28.27 points lower at 6174.90, while the FTSE 250 ended 0.29% or 48.83 points lower at 16,926.12. Oil futures recouped losses late in the session, while base metals saw largely lacklustre trading.

At 1710 BST, the Brent front month futures contract was up 1.04% or 41 cents to $39.67 per barrel, while WTI futures traded higher by 0.65% or 25 cents at $38.57 per barrel, having spent much of the Asian session and most of European intraday trading in negative territory, on expectation of rising supplies from Iran and bearish US inventory data published overnight.

While oil futures rose marginally, three-month base metal futures tumbled on the London Metal Exchange, with the exception of primary aluminium (+1.2%). At 1635 BST, other major headline contracts including copper (-0.3%), lead (-1.5%), nickel (-0.9%), tin (-0.3%) and zinc (-0.4%) headed lower.

Elsewhere, precious metals registered decent gains on a weaker dollar, with the COMEX gold futures contract for June delivery up 0.58% or $7.10 to $1,235.70 an ounce. Spot gold was also up 0.58% or $7.11 at $1,232.13 an ounce. Concurrently, COMEX silver rose 1.28% or 19 cents to $15.41 an ounce, while spot platinum was up 1.77% or $17.07 to $979.55 an ounce.

Blue chips Glencore (+3.79%) and Anglo American (+4.86%) led the FTSE 100 gainers shrugging off troubles in the metals market. On the FTSE 250, Acacia Mining (+6.07%) and Kaz Minerals (+3.21%) led the way following positivity in the precious metals market.

However, the positive story of the session belonged to Tui (+4.96%), after travel firm said overall demand and pricing for holidays has remained resilient in the first half of its financial year. Tui said it has sold 47% of its summer holiday programme, in line with last year, and at 1% higher average selling prices, meaning revenue from the programme has been lifted 3%.

Going the other way, Pearson (-3.37%) was the biggest FTSE 100 faller after Deutsche Bank said in a client note that the global education publisher’s valuation was full, trading on a 15.8x 2016 price-to-earnings ratio it believes is high given structural challenges and revenue decline.

Finally, Barclays declined following reports its Asia Pacific co-chief executive Eiji Nakai will leave the bank at the end of June.