Market Report: Miners and energy stocks nosedive as oil rally fadesComments Off on Market Report: Miners and energy stocks nosedive as oil rally fades
It was the same old story for the Footsie today, with a rout on commodity and energy stocks taking its toll on the blue-chip index.
The culprit was the falling copper price, dragged down once again by concerns of weak demand from China and a firming US dollar.
Antofagasta lost 6.1p and fell to 366.1p, Rio Tinto slipped 28.5p to 1625.5p and BHP Billiton dropped 5.7p to 643.2p.
Anglo American, whose shares have slid another 18% so far this year, was also among the casualties, after its South African unit, Anglo American Platinum, said it will report a bigger-than-expected loss of about £518 million for 2015. It fell 0.4p to 266.6p.
The abrupt end of an oil price rally — Brent crude sank 78 cents to $31.41 a barrel on renewed oversupply fears — meant energy stocks shared the pain, with BP down 7.7p at 345p and Shell 15p lower at 1374p.
Ophir Energy, however, bucked the trend, climbing 7p to 91.2p after it signed an agreement with Schlumberger on its Fortuna project in Equatorial Guinea.
Oil’s retreat was also the main driver of the FTSE 100’s 14.95-point decline to 5885.42.
Analysts said there was little in sight to inspire a reversal.
“Given the fractious state of the market right now, there can be little surprise if traders elect to hit the sell button early on, and with London’s blue-chip index now testing negative territory, it appears that patience has already run out,” said Trustnet Direct market analyst Tony Cross.
Lloyds was also battling for the biggest loser title after a JPMorgan downgraded its price target on the stock from 98p to 90p. The brokerage said there could be revenue pressure as interest rates looked set to stay lower for longer, though it was best positioned in its sector to cope. Lloyds fell 2.13p to 64.7p.
BT was 6.9p down at 48.35p after a group of 121 cross-party MPs led by Grant Shapps backed a report calling for the separation of broadband provider Openreach over the weekend.
Imagination Technologies, which makes and supplies tech for Apple’s iPhones, escaped the general stock-market gloom after the company said it was ready to cut costs if necessary given “the challenges it is facing in the current economic backdrop of the industry”.
Imagination, ahead by 2.25p at 124.75p, also responded to a report at the weekend that it could sell its Pure digital-radio arm, saying it was “reviewing its strategic options for this business”.