New commodity sell-off hurts the mining giants

BIG commodity stocks were in the red as the price of a barrel of Brent Crude dropped 3.1pc to about $39. It hit many of the big names with Glencore off 4.9pc or 7.4p at 143.8p, Anglo American down 4.33pc or 21.7p at 479.1p, Rio Tinto easing 3.85pc or 74.5p to 1863p and BHP Billiton ceding 3.65pc or 28.4p to 750p.

West Texas Intermediate fell about 3.2pc to just above $38 a barrel. Barclays fuelled the downbeat sentiment by predicting that a twomonth rally in commodity prices could end, saying it did not reflect market fundamentals.

The bank said net flows into commodities totalled more than $20bn in January and February – the strongest start to a year since 2011 – and prices could tumble by up to a quarter.

The FTSE 100 subsided 0.58 points to 6105.9 as oil prices extended losses on concerns about rising US crude stockpiles. Investors tucked into shares in

Premier Foods yesterday on hopes of a takeover battle for the Mr Kipling cake maker.

The stock was 8.65pc or 4.5p tastier at 56.5p after Premier’s chief executive Gavin Darby predicted that another potential bidder could challenge US spice maker McCormick’s £496m approach.

Premier has already rejected two tentative offers from McCormick and instead agreed a ‘co-operation’ deal with Japanese noodle maker Nissin Foods, which has taken a 17.27pc stake at 63p per share.

Analysts have speculated that McCormick, which initially offered 52p a share, could raise its subsequent 60p-a-share bid by 5p.

Premier rejected the approaches as undervaluing it, but some shareholders have urged it to talk to McCormick. The Bisto gravy and Sharwood’s curry sauce maker later indicated its readiness to look at a higher bid.

The US group said it was willing to consider one, provided Premier gave

it access to pension documentation and other information.

McCormick is facing a ‘put-up-orshut-up’ deadline of April 20 to announce a firm intent to bid or walk away. Broker Liberum Capital said Premier’s net debt, which stood at £585.3m in November, and its ‘large’ pension liability of £4.2bn were weighing on its share price and limiting opportunities.

‘In our view, Premier is better off as part of a larger group,’ the broker said in a note.

Marks & Spencer was among the main risers, gaining 3.06pc or 12p to 404.5p.

Shares in Irn-Bru, Rubicon and Tizer maker AG Barr fizzed up 0.29pc or 1.5p to 520.5p as it increased pre-tax profits in the 53 weeks to January 30 by 7pc to £41.3m.

Barr said it believed the strength of its brands and ‘product reformulation’ would help it to ride out any impact from Chancellor George Osborne’s sugar tax. But natural sweetener maker Pure

Circle, which has been tipped to benefit from the tax as drink makers replace sugar with its products, soured 2.06pc or 8p to 380p. Else- where among smaller companies, Slovenia oil and gas group Ascent Resources – in keeping with the name – soared 155pc to 4.98p on news of a takeover approach from Ukraine-focused Cadogan Petro

leum. Cadogan’s shares rose 1p, or 10.26pc or 1p to 10.75p.

Among the small-cap winners was also Cloudbuy, which advanced 16.67pc or 1.12p to 7.88p Last week existing shareholder Roberto Sella agreed to lend the e-marketplace developer up to £5.75m.

Metal Tiger gained more than 21.43pc or 0.52p to 2.98p as another warrant exercise took the cash raised by the resource investor through this route to more than £539,000 in just under two weeks.

Shares in the company have more than doubled recently following upbeat drill reports from its 30pc joint venture in Botswana.

Kurdistan-focused Gulf Keystone Petroleum saw a further 50pc wiped off the share price last week, but today the stock rebounded 8.13pc or 0.5p to 6.65p.

Elsewhere in oil, New Zealand and Australia specialist Mosman Oil and

Gas lost 12.9pc or 0.1p to 0.68p after it reported a tough 2015.