Sector movers: Natural resource stocks up, banks and airlines in mixed session

The FTSE 100 ended a mere 0.01% or 0.71 points higher at 6,361.80, while the FTSE 250 was 0.29% or 50.19 at 17167.40. Gold futures continued in negative territory for yet another session, in wake of the US Federal Reserve's decision to maintain interest rates at 0.25% last week, but leaving the door open to an increase in December.

The move continues to dent confidence in the precious metals market. COMEX gold futures contract was down 0.58% or $6.00 at $1,134.80 an ounce, while spot gold was 0.67% or $7.63 lower at $1,134.48 an ounce. COMEX silver fell 0.37% or 20 cents to $15.37 an ounce, while spot platinum was 1.37% or $13.49 lower at $971.64 an ounce. Base metals futures continued lower in late afternoon European trading.

Past the midway point of the session, primary aluminium (up 0.3%) was the only London Metal Exchange three-month delivery contract in positive territory. Nickel (down 0.7%), copper (down 0.2%), lead (down 0.2%), tin (down 1.2%), and zinc (down 0.8%) futures were all trading lower.

However, Glencore (up 2.76%) fought off the dour mood in the metals market and lukewarm Chinese factory data to end the session as the biggest FTSE 100 gainer of the session. Natural resource midcaps – Premier Oil (up 4.09%), Ophir Energy (up 4.43%), Kaz Minerals (up 4.57%) and Petra Diamonds (8.37%) – were among the biggest FTSE 250 gainers.

Away from natural resource stocks, the banking sector had a mixed session. Blue chip HSBC slid after reporting adjusted third quarter pre-tax profit that missed analysts’ expectations.

Other banks, including Barclays, Royal Bank of Scotland and Lloyds Banking Group, rallied as sentiment in the sector was lifted after Commerzbank said it will pay a dividend for the first time since 2007. Germany's positive reaction to Greek bank stress tests also provided financial stocks a boost.

The airline sector also had a mixed session. EasyJet descended after HSBC downgraded the stock to ‘reduce’ from ‘hold’ and cut the target price to 1,600p from 1,800p. However, Ryanair soared after posting a 37% rise in first-half profit after tax, saying full-year net profit will be towards the upper end of its guidance range and lifting its traffic target.

Finally, outsourcing group Serco (up 6.46%) provided a positive footnote to proceedings as it got a boost after RBC Capital Markets upgraded the stock to ‘sector perform’ from ‘underperform’, keeping the price target at 9,500p.

“Whilst risks clearly remain and the recovery will take time, for the first time in a while we see more limited downside and the balance sheet is no longer an issue post the Intelenet disposal,” the bank said.

Nonethless, RBC said there were still a number of issues with the stock, which has been hit by a string of profit warnings.