Sector movers: Miners track metals lower as Credit Suisse cuts price forecasts

3rd Apr 2013 13:48

With the exception of Vedanta Resources, mining stocks were sold off across the board on Wednesday as metals prices came under pressure.Weak manufacturing data from the US, Europe and the UK this week sent both silver and copper prices to eight-month lows today. EVRAZ, ENRC, Fresnillo, Glencore and Xstrata were all among the worst performers on the FTSE 100 in afternoon trade, registering declines of between 3.0% and 6.0%.Credit Suisse also put a dampener on share prices in the sector today after cutting target prices for several stocks. The broker said: "Despite more restrained spending, 2013/14 will be a period of price discovery, as markets move into surplus and the sector lives through the over-spend of prior years. We see downside risk to prices in H213 and this remains a challenging investment backdrop in the short run."Even Rio Tinto, which the broker labelled as its "preferred large cap" in the sector, was registering slight losses, trading down 1.4% after its price target was slashed by 5.0%. Rio was also in the news today on reports that it has hired Deutsche Bank to help sell Australian coal assets that could bring in around $3.0bn, according to The Wall Street Journal.Vedanta however was making decent gains as investors welcomed the decision by India to grant the company an appeal over the closure of its copper smelter in Tuticorin, Tamil Nadu.In a separate note, Credit Suisse said that it expects further weakness in gold through the second half of 2013 and has cut its price forecasts for the remainder of 2013 by between 13% and 18%. The broker said that the reasons to be moderately positive on the price that it had identified three months ago ("namely real rates in the US becoming more negative, market concerns about US Federal debt and credit rating, growth in Asian demand") have either failed to emerge or had only the briefest effect on price.Credit Suisse expects gold to average $1,580 an ounce over 2013 as a whole, falling to $1,500 in 2014. These figures are now broadly in line with other estimates.Silver forecasts have also been reduced with the price now expected to average $28.50 and $27.20 over this year and the next.Top performing sectors so far todayAutomobiles & Parts 6,333.82 +1.57%Technology Hardware & Equipment 1,119.85 +1.21%Oil Equipment, Services & Distribution 24,693.87 +0.78%Household Goods & Home Construction 10,372.45 +0.74%Gas, Water & Multiutilities 5,810.24 +0.68%Bottom performing sectors so far todayIndustrial Metals & Mining 2,069.67 -4.51%Mobile Telecommunications 4,401.60 -1.90%Mining 17,366.41 -1.81%Forestry & Paper 9,613.44 -1.76%Insurance (non-life) 1,749.50 -1.35%BC