Sector movers: Resources stocks rocked by trade worries
Commodities-related sectors were generally the worst hit in London on Wednesday after President Trump whipped out his latest trade bazooka, with only two sectors in positive territory.
Big miners, oil majors and other resources stocks took a hammering, with metals prices such as copper futures prices were down almost 1% on the LME and Brent crude oil down 2.8% to $76.67 per barrel.
Oil was down as Libya's National Oil Corporation lifted force majeure and restarted oil shipments after regaining control of the terminals following clashes between rival militias last month.
Metals prices, meanwhile, were the cause of pain for the likes of Glencore, Anglo American, BHP and Rio Tinto, with zinc, aluminium and copper all down. Copper in particular plummeted more than 3% on the Comex to hit its lowest level in almost a year, on demand concerns in light of the increased trade tensions after Washington confirmed it was planning tariffs on another $200m of Chinese goods.
"If Dr Copper is to be believed then we have struck a turning point in the global economy," said market analyst Jasper Lawler at London Capital Group.
Analysts at Goldman Sachs recently told clients that: "Concerns about a trade war hurting commodities are overdone, so expect prices to continue higher." Goldman expects commodities in general to rise 10% over next 12 months, believing most commodities subject to tariffs can be rerouted and sold to other markets, averting a supply glut and associated price declines.
Broker SP Angel agreed, though noted that "higher prices may serve to dampen demand in some areas".
Top performing sectors so far today
Household Goods & Home Construction 16,457.88 +0.60%
Fixed Line Telecommunications 2,635.91 +0.19%
Bottom performing sectors so far today
Industrial Metals & Mining 4,491.00 -5.38%
Mining 17,736.79 -3.29%
Software & Computer Services 1,778.85 -3.09%
Mobile Telecommunications 4,121.62 -2.07%
Oil & Gas Producers 9,813.84 -1.80%