Sector movers: Resource stocks dominate as London indices head sideways
Resource stocks, benefitting from an uptick in oil prices and a relatively stable metals market, dominated proceedings in pre-Christmas trading on Thursday, as both major London indices headed sideways.
Just moments before the close of proceedings, the FTSE 100 was broadly flat, a mere 0.03% or 2.07 points lower, at 6,238.91, as was the FTSE 250, up a mere 0.08% or 13.50 points, at 17,405.38. The oil market registered further price increases with WTI futures extending overnight gains well into the session.
At 1003 GMT, the Brent front-month futures contract was up 0.24% or nine cents at $37.45 per barrel, while WTI was up 0.56% or 21 cents at $37.71 per barrel, as the spread between both futures contracts was initially wiped out overnight and subsequently turned into a premium in favour of the US benchmark.
Support to the upside lasted well into Wednesday, as well as early trading in Asia with the US Energy Information Administration reporting that the country’s crude oil inventories fell by 5.9m barrels in the past week, compared with analysts' expectations for an increase of 1.1-1.3m barrels.
Prior to the EIA data release, oil producers’ cartel OPEC claimed the oil price would recover to $70 per barrel by 2020. Elsewhere, selected base metals saw positive trading on the London Metal Exchange overnight. Copper (up 0.3%), primary aluminium (up 1.8%), tin (up 0.7%), zinc (up 1.7%) and lead (up 0.8%) three-month delivery futures contracts closed on a positive note on Wednesday. At 1003 GMT during the current session, COMEX copper was marginally down 0.16% or 35 cents at $212.10 per pound.
Invariably, resource stocks dominated proceedings in London during reduced trading hours. Oil and gas giant BP (up 1.17%) and British Gas owner Centrica (up 1.15%) were among the biggest blue chip gainers, though Rio Tinto (down 1.22%) and Glencore (down 1.21%) could not hold on to the previous session’s gains.
Midcaps Ophir Energy (up 4.94%), Acacia Mining (up 3.86%) and Cairn Energy (up 3.65%) were the biggest gainers on the FTSE 250. However, Nostrum Oil & Gas, which was on the leading risers list for Wednesday, could not hold on to overnight gains slipping 2.32% lower.
Away from resource stocks telecommunications giant BT Group (down 1.54%) and supermarket leader Tesco (down 1.44%) fell to some festive profit taking by traders ahead of the Christmas closure.