Sector movers: Miners plummet as investors seek defensives

20th Mar 2012 16:13

Miners were the laggards of the day on Tuesday with worries over the Chinese economic outlook prompting a shift into relatively 'safer' assets, such as telecoms and retailers.Concerns about slowing growth in China seem to have dampened sentiment today, with miners bearing the brunt of the sell-off as falling house prices and rising fuel costs are feared to be limiting economic expansion. Meanwhile, China raised its fuel prices for the second time in less than six weeks - the world's second-largest oil consumer upped prices by 600 yuan ($95) a metric ton. Copper inventories at bonded warehouses in Shanghai climbed to 530,000 tonnes last week, according to the median estimate in a Bloomberg News survey of traders and analysts. That compares with the 200,000 tonnes seen in the last three months of 2011. This may be an additional factor behind the selling seen today in copper futures and in miners' shares.Furthermore, Ian Ashby, President of BHP Billiton's iron ore division, told reporters in Australia that "the (Chinese) economy is shifting, it's changing. Steel growth rates will flatten and they have flattened." Similarly, Rio Tinto's Managing Director of expansion projects David Joyce also said that the "rate of GDP growth in China is more immediately slowing". Nevertheless, he assured that the company remains confidence of a soft landing for the economy. Both BHP Billiton and Rio Tinto were among the worst performing stocks, joined by sector peers Fresnillo, Anglo American, Vedanta, ENRC, Antofagasta, Kazakhmys and Randgold. Commodity marketing and mining giant Glencore International fell by a lesser amount after announcing that it is to spend £3.9bn on the issued and outstanding shares of Viterra, the Canadian agri-business and food ingredients firm. Glencore was down 1.8% before the close, outperforming the wider mining sector, which fell 3.4%.BCTop performing sectors so far todayMobile Telecommunications 3,968.05 +2.21%Food & Drug Retailers 4,128.13 +0.28%Pharmaceuticals & Biotechnology 9,823.11 +0.11%Fixed Line Telecommunications 2,488.44 +0.08%Bottom performing sectors so far todayMining 21,071.57 -3.41%Industrial Metals & Mining 4,358.28 -2.90%Automobiles & Parts 4,912.28 -2.46%Chemicals 8,203.24 -1.94%Industrial Engineering 7,906.53 -1.91%