Market Report: ECB President comes to the rescue of miners

Super Mario Draghi came to the rescue of miners as the European Central Bank President hinted at extending its bond-buying programme.

Industrial metals groups got a boost from hopes that European nations will enjoy cheaper money for longer to encourage economic growth. Glencore was the biggest beneficiary, up 6.55p at 117.1p, while Rio Tinto was 42.5p better off at 2,468.5p and BHP Billiton 20p richer at 1,116.5p.

But Anglo American was down 7.7p at 596.9p after slashing diamond production by 27 per cent in the third quarter at De Beers, its most profitable division.

Anglo’s greater exposure to diamonds has over the past couple of years has protected it from the fall in iron ore and coal prices. However, a global glut has caused the diamond market to go the same way.

The pressure is now on to deliver in the crucial final quarter, which covers the Christmas shopping season when consumers splash the cash on jewellery.

The numbers took their toll on FTSE 250 miner Petra Diamonds, which fell 1.2p to 83.75p.

Mr Draghi’s comments in mid afternoon fuelled the mining sector’s turnaround and lifted the FTSE 100 into positive territory, up 27.86 points at 6,376.28.

A profit warning from Travis Perkins, down 118p or 6 per cent at 1,845p, cemented the Wickes owner’s place at the bottom of the Footsie. Lower DIY spending in July and August means annual profit growth will be at the lower end of market expectations.

The DIY downturn also hit FTSE 250 home insulation specialist SIG, which slumped 37p to 141.5p after its own profit warning. The gloomy outlook also dragged B&Q owner Kingfisher down 15.4p to 351p and plumbing supplies group Wolseley down 72p to 3,730p.

On AIM, Strategic Minerals surged 0.05p or 16 per cent to 0.36p after it revealed that Glencore had offloaded its small stake in the miner as part of its sale of non-core assets.

Irish oil drillers including Providence Resources, which fell 1.5p to 19p, were knocked by reports that the government plans to hike the tax rate on future oil production from 40 per cent to 55 per cent.