Sector movers: Metal prices drive market down
The London market was pushed lower for most of the day on Tuesday due to falling metal prices throughout most of the day, however started to bounce back as commodities started to rebound.
The FTSE 100 ended down 28.9 points (0.45%) at 6,342.28, while the FTSE 250 dropped 88.92 points (0.52%) to 16,898.03.
At 1449 BST, the Brent front-month futures contract was trading 0.32% or 16 cents higher at $50.02 a barrel, while the WTI was up 0.62% or 29 cents at $47.39 a barrel as both benchmarks headed lower in Asian trading but recovered marginally later on in the European session.
Analysts at Barclays expect a moderation in Chinese oil demand growth over the fourth quarter, but not a slump as feared by some, noting that opportunistic storage-linked buying by Beijing “to fill commercial and strategic reserves could still provide support to the oil price.”
Midway through the London Metal Exchange session, three-month delivery contracts of primary aluminium (down 3.1%), copper (down 1.3%), lead (down 1.8%), nickel (down 2.1%), tin (down 1.2%) and zinc (down 2%) all contributed to industrial metal stocks declining.
Glencore was one of the biggest fallers, taking a hit due to industrial metal prices. On the FTSE 250, natural resource related companies were also the biggest affected. Evraz was impacted the most on the back of gold and other precious metal prices mostly down during the day, but then rallying in the late afternoon. Kaz Minerals also dipped with copper prices going the same way as the share price.
Oil companies Tullow Oil and Premier Oil also were affected by commodity prices, with lower oil prices early in the day causing repercussions for the companies’ share prices.
The industrial engineering sector was also a big casualty, largely down due to Weir Group and Rotork on the FTSE 250 dropping significantly.