UK equities were slow out of the blocks, with the major indices stumbling despite a contrary reaction to underwhelming economic data from China.
The FTSE 100 index was down 24 points at 6,114 after almost an hour of trading, despite the mining heavyweights notching up some handsome gains and the oil heavyweights benefiting from a surge in the price of Brent crude, after Goldman Sachs declared that over-supply issues are over.
“Analysts pointed to the steps taken to cut production, and unforeseen tragedies like the raging wildfires in Canada, as the main reasons why the oil glut has begun to decrease,” noted Connor Campbell at foreign exchange trading platform Spreadex.
The miners went against type, advancing briskly despite more evidence that growth in the Chinese economy is slowing down; investment, factory output and retail sales figures released on Saturday all undershot expectations.
Despite this, metals prices have hardened as China's central bank signalled its intention to continue with policies that would support growth in the People's Republic.
Mid-cap miner Lonmin PLC (LON:LMI) was the best performer in the sector, climbing 14% to 186.25p after an upbeat trading statement in which it said cost savings are well ahead of schedule.
The company had net cash of US$114mln at the end of March, versus net debt of US$185mln six months earlier.
Stocks on London's junior market also got off to a subdued start, with the FTSE Aim All-Share down 0.6 at 723.9 and the FTSE Aim 100 six points in the hole at 3,379.
Plaza Centers N.V. (LON:PLAZ) was wanted, rising 11% to 3.05p, after it sold its 50% stake in the Riga Plaza shopping and entertainment centre in Riga, Latvia, for around €93.4mln.
Union Jack Oil PLC (LON:UJO) carried the standard for small-cap oil producers, climbing 7.7% to 0.14p after its full-year results.
The company said it expects to make more acquisitions to further bolster its portfolio of onshore UK oil and gas assets. Underpinning its plans is an 8% stake in the Wressle field, where production is set to begin in the second half of 2016.
KEFI Minerals plc (LON:KEFI) added just under 4% at 0.53p after it said it had received formal confirmation that the Ethiopian government will plough US$20mln into the company’s Tulu Kapi gold mine in the country.
In contrast, Trinity Exploration & Production PLC (LON:TRIN) slid 8.7% to 2.51p as the Trinidad & Tobago-focused energy company said a further moratorium on debt repayments dad been agreed relating to its outstanding debt balance of US$13mln.
The extension is only until the end of this working week, however.
Sector peer Frontera Resources Corporation (LON:FRR) gave up 8.4% at 0.32p as it issued 180mln shares to two strategic services providers to pay for some US$780,000 of oil field services.
Preview
The FTSE 100 looks set to kick off the week in negative territory amid growing concerns the US might be preparing for a June hike to interest rates.
This, and the continued uncertainty ahead of the Brexit vote next month, means the index of blue chip shares is likely to open 20 points lower at 6,118.50, according to the spread betting firms.
In Asia overnight, the Nikkei 225 was up 0.3%, boosted by hopes of a sales tax freeze, while China’s main markets staged recovery after initially reacting negatively to another raft of economic data.
Investment, factory output and retail sales figures released on Saturday all undershot expectations.
Yet by mid-afternoon local time the Shanghai Composite was ahead 0.2%, while in Hong Kong the Hang Seng had advanced more than 1%.
Here in the UK, the release on Tuesday of the April inflation numbers will be closely scrutinised, while later in the week we have unemployment, wages and retail sales stats.
On the corporate front, Merlin Entertainment, Vodafone and Thomas Cook are among the companies scheduled to report this week along with Royal Mail and SAB Miller.
- Brent Crude Oil up 1.4% at US$48.50 a barrel as Goldman Sachs said two years of oversupply is almost over.
- Gold up 0.7% and ahead for a second successive day US$1.277.70 per ounce amid predictions the yellow metal could hit US$1,400 by the year end.