Stagnant markets as energy firms see value fall

The top index in London was stagnant yesterday, with a poor showing for its natural resources sector.

A weak Chinese economy weighed on commodity prices because the country is one of the biggest buyers of mining goods.

It sent Anglo American, Rio Tinto and Antofagasta close to the bottom of the FTSE 100, which ended the day only slightly in the green as a result.

By the end of the day, the index was up 8.26 points, or 0.1%, to 7,509.15.

Meanwhile, the price of oil also fell, pushed down by progress in negotiations with Iran over a potential nuclear deal. BP and Shell shares fell.

The price of Brent crude oil dropped 4% to 94.25 dollars per barrel.

The falls might signal relief for soaring prices globally and help take the edge off inflation, said Chris Beauchamp, chief market analyst at online trading platform IG.

“A big component of the bounce since the July low has been the expectation that inflation readings will moderate thanks to the falls in oil and other commodities,” he said.

“Today’s fresh drops, caused in no small part by the China data, will help those arguing that last week’s US CPI (consumer prices index inflation) was not a one-off.”

In Europe and the US, the main indexes seemed to be in slightly better moods to the FTSE yesterday.

By the end of the day, Germany’s Dax had risen 0.2%, while the Cac 40 in Paris was up 0.3%.

The biggest fallers on the FTSE 100 were GSK, down 44p to 1,406p, Rio Tinto, down 108.5p to 4,735.5p, Anglo American, down 62p to 2,901p, Mondi, down 31p to 1,674p, and Haleon, down 5p to 266.7p.