FTSE 100 falls as oil slides but Anglo American lifted by diamond sales

Powered by Guardian.co.ukThis article titled “FTSE 100 falls as oil slides but Anglo American lifted by diamond sales” was written by Nick Fletcher, for theguardian.com on Tuesday 26th January 2016 09.48 UTC

With global markets tumbling again as oil slides and worries about a Chinese slowdown re-emerge, it’s no surprise to see precious metal miners bucking the trend as investors seek the havens of gold and silver.

More surprisingly, Anglo American is up 3.7p at 230.3p. But its gains can be attributed to news that rough diamond sales from its De Beers group had more than doubled from $248m to $540m in the first sales period of this year compared to the final one of 2015.

On the precious metals front, Randgold Resources has risen 77p to £46.73 while Fresnillo is up 11p at 669p.

But with Brent crude sliding 2.3% to $29.79 on continuing oversupply fears, markets are again under pressure. News this week of record production from Iraq has outweighed talk from Opec of possible cuts in tandem with other producers. A drop in Chinese rail freight volume raised fears the country’s economy is growing by less than the official figures show.

So the FTSE 100 has fallen 1.3% or 81.37 points to 5795.63, with oil companies among the biggest losers. Royal Dutch Shell is down 45p to £13.57 and BP is off 9.9p at 340.25p.

Banks have also dipped, with Barclays down 5.8p at 176.05p as analysts at UBS cut their price target from 302p to 215p albeit with a buy rating.

Dixons Carphone is down 6.3p at 460.8p despite a strong Christmas update, but its announcement of a new deal with TalkTalk has pushed the telecoms company up 14.4p to 204.4p.

Elsewhere housebuilder Crest Nicholson has climbed 29p to 541.5p after positive full year results. In a buy note on Crest, Peel Hunt said:

A year of strong growth with plenty more to come. Full year results were in line with our expectations, with pretax profit rising by 32% to £154m. The group remains on track to meet it’s revenue targets over the next four years, with volumes set to grow by around 50% by 2019. The shares continue to look good value to us trading at a discount to the sector, despite offering the highest net asset value and dividend growth over our forecast period.

Kingfisher has fallen 9.5p to 314.4p in the wake of Monday’s strategic update, with Numis cutting its recommendation following the update:

We think the market is probably right to be initially sceptical of the financial aspects of the ‘One Kingfisher’ programme, given the forecast downgrades required for years 1-3, the cash implications and uncertain nature of the back-end weighted profit benefits, although sentiment could improve if the plan can deliver tangible benefits. The shares are trading in line with the sector at 15 times PE to 2016 but we think the heightened risk and liquidity implications are unfavourable and downgrade our recommendation to reduce [from hold].

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