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London close: Resources price slide hurts mining, oil majors as ECB stands pat

By Andrew Schonberg

Date: Thursday 09 Mar 2017

London close: Resources price slide hurts mining, oil majors as ECB stands pat

(ShareCast News) - Stocks in London ended Thursday lower with the shares of mining and oil heavyweights taking a beating as commodity prices headed south, and as European Central Bank (ECB) stood pat on its key interest rate as expected.
At the closing bell the FTSE 100 was down by 0.27% or 19.65 points to 7,314.96 and the FTSE 250 was down 0.21% or 39.53 points at 18,891.54.

It was a different story in Europe, where the Euro Stoxx 50, Dax and Cac 40 all made gains, while across the pond Wall St's Dow Jones, S&P 500 and Nasdaq Composite all improved.

ECB's main policy lever, the interest rate for its main refinancing operations, was kept at 0.00%. The so-called 'corridor' around the refi rate was also stayed, with the asset-purchasing programme also to continue unaltered.

"The muted market reaction following the ECB's decision to leaving key interest rates unchanged in March should be no surprise," said FXTM's Lukman Otunuga.

Research-analyst Otunuga also noted the central bank's decision-making and rationale had already been priced-in by the market, hence the lack of stock-market volatility afterwards.

However, increasing expectations of a rate hike by the US Federal Reserve next week was broadly dollar supportive. It also saw safe-haven gold's appeal to investors wane, with silver and copper retreating.

"Gold received a pummeling this week, with prices crashing (briefly) to a fresh five-week low at $1203.13 during Thursday's trading session as expectations heightened over the Fed Reserve raising US interest rates next week," said Otunuga.

He and others in the market saw potential further downside for the yellow metal, more so if the US non-farm payrolls data out Friday exceeded expectations.

In short, the fall in metals prices hurt miners such as ex-dividend BHP Billiton, Anglo American, Glencore and Antofagasta, these comprising four of the five biggest blue-chip falls.

Rio Tinto fell on news its chairman, Jan du Plessis, had been poached by BT Group.

At the same time, crude-oil futures were shaken lower as lingering worries about the global glut of the black liquid heightened after hefty rises in US inventories on Wednesday.

This was "just as lower credit growth figures in China suggest the world's second largest economy might be slowing," said Hargreaves Lansdown's Nicholas Hyett.

Oil-industry players BP and Royal Dutch Shell suffered. Shell has agreed to sell all of its in-situ and undeveloped oil sands interests in Canada, along with reducing its share in the Athabasca Oil Sands Project. This would result in a net consideration to Shell of $7.25bn.

Cheaper oil was a boon for others, with airlines easyJet and International Consolidated Airlines both flying towards the top of the leaders' board.

Elsewhere on the news front, Morrisons topped the FTSE 100 list of fallers after warning on the impact of the weak sterling, as well as depreciation and pension costs, as it lifted its FY pre-tax profit.

Old Mutual was another faller after turning in a flat full-year pre-tax profit of £1.2bn that included impairments of about £160m.

In the same sector, ex-dividend insurer Aviva topped the blue-chip gainers' ladder thanks to a rise in its full-year operating profit 12% to £3.01bn, while its post-tax profit fell 22% to £859m, including the £380m after-tax charge due to the reduction in the Ogden discount rate.

Market Movers

FTSE 100 (UKX) 7,314.96 -0.27%
FTSE 250 (MCX) 18,891.54 -0.21%
techMARK (TASX) 3,449.26 0.19%

FTSE 100 - Risers

Aviva (AV.) 544.00p 6.46%
Capita (CPI) 549.00p 4.67%
Admiral Group (ADM) 1,910.00p 4.43%
International Consolidated Airlines Group SA (CDI) (IAG) 571.00p 4.20%
easyJet (EZJ) 974.50p 3.67%
Unilever (ULVR) 4,002.50p 2.59%
Paddy Power Betfair (PPB) 8,620.00p 2.38%
Hikma Pharmaceuticals (HIK) 2,115.00p 1.78%
Royal Mail (RMG) 407.30p 1.65%
Direct Line Insurance Group (DLG) 340.80p 1.58%

FTSE 100 - Fallers

Morrison (Wm) Supermarkets (MRW) 230.80p -6.56%
BHP Billiton (BLT) 1,249.50p -5.77%
Anglo American (AAL) 1,149.00p -4.61%
Glencore (GLEN) 307.00p -3.66%
Antofagasta (ANTO) 754.50p -3.08%
Ashtead Group (AHT) 1,659.00p -2.07%
Royal Dutch Shell 'B' (RDSB) 2,180.00p -2.04%
Standard Chartered (STAN) 739.90p -1.86%
Old Mutual (OML) 224.90p -1.83%
Rio Tinto (RIO) 3,202.50p -1.79%

FTSE 250 - Risers

Dignity (DTY) 2,498.00p 8.80%
Cobham (COB) 134.00p 5.43%
Restaurant Group (RTN) 384.30p 3.72%
CMC Markets (CMCX) 132.70p 3.11%
Ladbrokes Coral Group (LCL) 124.60p 2.89%
William Hill (WMH) 269.30p 2.71%
Inmarsat (ISAT) 761.50p 2.49%
UDG Healthcare Public Limited Company (UDG) 725.00p 2.18%
Virgin Money Holdings (UK) (VM.) 342.00p 1.91%
Just Eat (JE.) 573.50p 1.87%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 342.00p -13.20%
Ferrexpo (FXPO) 139.30p -8.11%
Kaz Minerals (KAZ) 448.80p -7.88%
Petra Diamonds Ltd.(DI) (PDL) 131.70p -7.88%
Tullow Oil (TLW) 243.20p -7.35%
Vedanta Resources (VED) 785.50p -6.99%
Evraz (EVR) 208.70p -6.75%
Cairn Energy (CNE) 204.60p -6.14%
Hunting (HTG) 530.00p -4.25%
Jupiter Fund Management (JUP) 411.30p -3.74%

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