FTSE 100 movers: Miners keep index firmly in the red

The FTSE 100 was firmly in the red again on Wednesday, down 110.76 points (1.86%) to 5,851.55 by mid-afternoon.

Household Goods & Home Construction

11,324.30

15:45 15/11/24

-0.77%

-87.44

Miners plunged and led the fallers as metal prices fell as part of a wider commodities downturn. Glencore and Anglo American led the list of the index’s biggest fallers, followed closely behind by BHP Billiton, Antofagasta and Rio Tinto.

It was the second day of falls for BHP Billiton after it sustained a half-year loss of $5.67bn and sliced its dividend deeper than most analysts predicted.

The mining company adopted a new more cautious payout policy as it hunkered down for what it believes will be a prolonged period of low and volatile commodity markets.

The Anglo-Australian colossus also cut its capital and exploration spending by 40% to $3.6bn, which combined to help keep its half-time net debt at $25.9bn in line with consensus forecasts for the six months to 31 December.

In line with a new dividend policy designed to protect the balance sheet, and net cash flow shrinking 45% to $5.3bn, BHP chopped its interim payout by almost three quarters to 16 cents from 62 cents a year before.

Standard Chartered also took a large hit as Bank of America Merrill Lynch downgraded stock to ‘neutral’ from ‘buy’ and slashed the price target to 475p from 650p following its 2015 results.

The bank ended last year with a pre-tax loss of $1.5bn, implying a fourth quarter loss of $3.2bn.

Bank of America ML said the loss exceeded its estimate of $1.7bn for the quarter, which was dominated by the costs of a rapid implementation of the restructuring plan announced in November.

However, ML said the forward-looking conclusion was the shortfall in the top line.

Merrill said the company’s revenue for 2015 was $5bn short of what it and consensus expected this time in 2014.

Investors couldn’t be swayed by an upbeat note from UBS that said Burberry’s pricing was not as stretched as rival Hugo Boss and it was better-positioned in the US market.

At the start of the second half of 2015, Hugo Boss’s prices on mainland China were at a level of 200 versus those for its goods in France at 100, analyst Helen Brand said.

Burberry on the other hand was already at a 150 premium to France which was already more or less in line with the rest of its sector at 148.

"Whilst we continue to see pricing power as limited for the [luxury] space given these stretched regional gaps we do not see Burberry following as dramatic route as Boss," Brand said.

Meanwhile Persimmon shares continued to rise after it increased its full year underlying profit before tax by 34% to £637.8m.

The housebuilder said on Tuesday revenue for the year to 31 December 2015 had also risen 13% to £2.9bn.

That was driven by an 8% increase in legal completions rising to 14,572, and a 4.5% increase in the average selling price to £199,127.

The company also commented that four years into its nine and a half year long term plan, its performance is significantly ahead of original expectations.

FTSE 100 - Risers

Berkeley Group Holdings (The) (BKG) 3,308.00p 2.67%
Persimmon (PSN) 2,081.00p 2.56%
Barratt Developments (BDEV) 573.50p 2.05%
Intertek Group (ITRK) 2,882.00p 1.80%
Taylor Wimpey (TW.) 179.50p 1.70%
Randgold Resources Ltd. (RRS) 6,615.00p 1.46%
Relx plc (REL) 1,225.00p 0.74%
3i Group (III) 425.20p 0.71%
Associated British Foods (ABF) 3,312.00p 0.42%
Compass Group (CPG) 1,234.00p 0.41%