Market report_ new commodity sell-off sparked by falling oil prices hurts the mining giants _ this is money

Big commodity stocks were in the red as the price of a barrel of Brent Crude dropped 3.1 per cent to about $39.

It hit many of the big names with Glencore off 4.9 per cent or 7.4p at 143.8p, Anglo American down 4.33 per cent or 21.7p at 479.1p, Rio Tinto easing 3.85 per cent or 74.5p to 1863p and BHP Billiton ceding 3.65 per cent or 28.4p to 750p.

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

Sell off: Oil prices extended losses on concerns about rising US crude stockpiles

The bank said net flows into commodities totalled more than $20billion 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.


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The stock was 8.65 per cent 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 17.27 per cent 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-or-shut-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 £4.2billion 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 3.06 per cent or 12p to 404.5p.

Shares in Irn-Bru, Rubicon and Tizer maker AG Barr fizzed up 0.29 per cent or 1.5p to 520.5p as it increased pre-tax profits in the 53 weeks to January 30 by 7 per cent 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 PureCircle, which has been tipped to benefit from the tax as drink makers replace sugar with its products, soured 2.06 per cent or 8p to 380p. Elsewhere among smaller companies, Slovenia oil and gas group Ascent Resources – in keeping with the name – soared 155 per cent to 4.98p on news of a takeover approach from Ukraine-focused Cadogan Petroleum. Cadogan’s shares rose 1p, or 10.26 per cent or 1p to 10.75p.

Among the small-cap winners was also Cloudbuy, which advanced 16.67 per cent 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 21.43 per cent 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 30 per cent joint venture in Botswana.

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

Elsewhere in oil, New Zealand and Australia specialist Mosman Oil and Gas lost 12.9 per cent or 0.1p to 0.68p after it reported a tough 2015.


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