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Miners struggle following slump in commodity prices

09 March 2017 16:50

Oil and commodity stocks were among the top blue-chip fallers as low oil and metal prices concerned the market.

Copper miner BHP Billiton (BLT), diamond digger Anglo American (AAL) and Glencore slumped between 3.6% and 5.4%.

Weaker oil prices are bad for sector giants BP (BP.) and Royal Dutch Shell (RDSB) as they imply lower earnings. Shell slid 2% lower and BP declined 1.4%.

Due to their weighting in the index the FTSE 100 closed 0.3% lower at 7,314.

Oil prices are depressed because investors are worried that rising US production will offset Opec's aim of cutting supply and push down prices.

West Texas Intermediate and Brent crude oil continued to decline and fell over 2% to $49 and $52 per barrel, respectively.

Gold retreated 0.2% to $1,205 per ounce and copper cheapened 1.2% to $5,643 per tonne.


In the US, stock markets started to recover on Thursday after energy stocks acted as a drag on the indexes on Wednesday.

In Asia, the Hang Seng and SSE Composite dropped by 1.2% and 0.7% respectively on Thursday ahead of an expected interest rate hike by the US Federal Reserve this month.

Japan's Nikkei 225 managed to defy subdued investor sentiment as a weaken yen boosted the country's exporters.


Oil giant Royal Dutch Shell (RDSA) announced it will sell all of its on-site and undeveloped oil sands interests in Canada and cut its share in the Athabasca Oil Sands project from 60% to 10%. The stock cheapened 1.7% to £20.89.

Insurance giant Aviva (AV.) gained 6.4% to 544p on annual results that showed improved operating profit, cash and a 12% hike in the total dividend to 23.3p. CEO Mark Wilson said Aviva was 'actively planning a capital return to shareholders' and debt reduction in 2017.

The UK's fourth largest supermarket chain Morrisons (MRW) fell 6.5% to 230.8p as investors take profits following a strong run. Management unveiled a good set of full year results with pre-tax profits of £337m, representing the first year of growth since 2011/12.

Morrisons' like-for-like sales were positive in all four quarters and it hiked the dividend by 8.6% to 5.43p. CEO David Potts insisted 'our turnaround has just started', although investors may be unnerved by the outlook statement. He flagged uncertainties due to higher imported food prices thanks to weak sterling.


Investors lost their appetite for pizza pusher Domino's (DOM) as full year results revealed slower UK like-for-like system sales for 2016 and a more muted UK sales performance in the first nine weeks of 2017. The stock slumped 17.5% to 325p.

Popcorn pusher and cinema chain Cineworld (CINE) was 0.4% lower as pre-tax profit fell 1.5% from £99.7m to £98.2m in 2016.


Regency Mines (RGM) announced UK Carbon Resolutions identified and secured a new metallurgical coal opportunity within the Appalachian area, which will be transferred into its joint venture partner Vali Carbon. Regency said it invested $150,000 for a 20% stake in the joint venture company. The shares sparked 18.7% higher on the news.

Estate agent Countrywide (CWD) retreated 2.3% as it reported a slump in pre-tax profits and unveiled plans to place over 21 million new shares for additional financial flexibility. Uncertainty following the Brexit vote and stamp duty changes had a significant impact on the property market. The firm said it will use funds from the placing to accelerate its digital rollout and unlock further cost savings.

AIM-listed Nautilus Marine Services (NAUT) plummeted 13% as revenue more than halved from $365,000 to $178,000 in the year to 31 December.

EQTEC (EQT) raised £485,000 to continue the development of the Newry Biomass project and for continued investment in its pipeline of projects. The shares were 18% lower.

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