Sector movers: Miners lead losses on weak outlook for prices

However, the largest losses were in fact sustained by miners. In a research note e-mailed to clients on Monday morning analysts at Credit Suisse explained the reasoning behind the substantial downgrades on bulk commodities and oil which they had carried out.

They now see an extended period of low iron ore prices, albeit at close to current spot prices. Nevertheless, they added they also saw “on-going downside risks” to their base estimates as a result of over-supply and falling industry costs.

Their prognosis on the outlook for base materials and precious metals however was more constructive.

In the same note they pointed out how BHP Billiton and Antofagasta were among their least preferred stocks in the commodity space, whilst Anglo American and Rio Tinto were two of their preferred picks.

All of the above came on the heels of a report on Friday, contained in the China Securities Journal, according to which Beijing was moving closer to a reduction in the reserve requirement ratio (RRR) for the nation’s banks.

The HSBC/Markit Chinese manufacturing sector purchasing managers’ index was due for release the next day.

On the positive side of the ledger, fixed line telecommunications stocks outperformed.

This came as telecoms group BT announced it had entered exclusive talks with Deutsche Telekom (DT) and Orange about buying their mobile operation EE for £12.5bn.

The period of exclusivity will last several weeks, allowing BT to complete its due diligence and for negotiations on a definitive agreement to be concluded, it said in a statement.

Top performing sectors so far today

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Fixed Line Telecommunications 4,523.09 +0.10%

Bottom performing sectors so far today

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Industrial Metals & Mining 1,190.20 -8.55%
Mining 13,003.76 -2.91%
Forestry & Paper 10,835.99 -2.61%
Oil & Gas Producers 6,436.71 -2.52%
Pharmaceuticals & Biotechnology 12,370.52 -2.51%