Sector movers: Resource stocks end week on positive turf

Resource stocks rose on Friday to post decent declines following a wider uptick in the commodities market.

The FTSE 100 closed 3.09% or 170.63 points higher at 5707.60, while the FTSE 250 ended 1.66% or 252.51 points higher at 15,431.31. Oil futures registered decent gains, while the previous session’s gold price spike cooled on profit taking as the weekend approached.

Conflicting reports suggested that Saudi Arabia might be willing to sign-up to a Venezuelan proposal that producer countries from the Organisation of the Petroleum Exporting Countries and those from outside ‘freeze’ their oil output at current levels if Iran also signed up to such an agreement.

At 1717 GMT, the Brent front-month oil futures contract was up 8.48% or $2.55 to $32.61 per barrel, while WTI rose 2.73% or $2.73 to $28.94 per barrel.

Meanwhile, the gold rally faltered as traders booked profits with the weekend in sight. The COMEX front-month gold futures contract was down 0.91% or $11.30 to $1,236.50 an ounce, while spot gold was down 0.81% or $10.04 to $1,236.66 an ounce.

COMEX silver fell 0.22% or three cents to $15.76 an ounce, while spot platinum fell 0.17% or $1.68 to $958.52 an ounce.

Selected base metal futures were in positive territory on the London Metal Exchange. At 1635 GMT, three-month futures contracts of copper (up 0.5%), primary aluminium (up 1.0%), nickel (up 1.5%) and lead (up 1.1%) headed higher. However, zinc (down 0.4%) and tin (down 0.6%) futures posted modest declines.

Invariably, Anglo American (up 18.36%), Glencore (up 12.29%), Antofagasta (up 11.25%) and Standard Chartered (up 10.95%) led the FTSE 100 gainers' rosters. On the FTSE 250, Tullow Oil (up 12.55%), Vedanta Resources (up 9.91%), Amec Foster Wheeler (8.78%) and Weir Group (up 7.90%) were the midcap stars of a positive session.

Away from resource stocks, supermarket leader Tesco (down 1.45%) led the blue chip fallers. Midcap retail stocks Jimmy Choo (down 2.59%) and Poundland Group (down 2.62%) also registered declines.

Finally, BT Group (down 0.49%) headed lower after UBS downgraded it to ‘sell’ from ‘neutral’ with an unchanged 430p price target, saying the risk/reward profile was unattractive. The bank said risks from increasing competition have been underestimated.

“Our estimates are broadly in line with consensus and assume a continuation of the current benign competitive environment. However, should competition intensify we see downside to 305p,” it added.