London’s FTSE 100 ended Tuesday some 88 points, 1.4%, lower at 6,135 after natural resources stocks once again weighed on the market.
For the miners the latest body blow came in the shape of Anglo American’s (LON:AAL) decision to cut its dividend, while another bad day for crude oil saw more value come off London’s ‘big oil’ stocks.
After Brent crude dipped beneath US$40 earlier this afternoon, BP (LON:BP.) ended the session 2.14% lower at 160p per share and similarly Shell (LON:RDSB) dropped 2% to 1,494p.
AAL’s dividend news was not well received, with the mining group losing more than 10% of its value to end Tuesday at 330.85p.
The fear is that AAL won’t be the last to make the tough choice, and that others will soon pare back shareholder payouts.
London’s blue-chip miners Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) lost 5.5% and 5% to 1,951p and 726.81p respectively, while Glencore (LON:GLEN) shed 6.3% to trade at 80p each.
Alastair McCaig at spread-betting firm IG said: “In years gone by the FTSE’s greater weighting in the mining and energy sectors had been a blessing, of late though it continues to be a millstone around its neck.”
Elsewhere, the slide continued for Entertainment One (LON:ETO) as the Peppa Pig owner’s new refinancing package failed to bring home the bacon – as far as investors were concerned.
Enquest (LON:ENQ) rose as the North Sea explorer unveiled a 26% jump in second half output, said it was confident of increasing production next year and is on course to achieve operating expenses of $26-$28 per barrel. Shares leapt more than 5% to 20p.