Market Report: Falling commodity prices leave investors out of pocket

Falling commodity prices may be great when it comes to filling up the car with petrol, but if you’re a stock market investor then they can leave you seriously out of pocket.

With oil more than halving over the past year and copper prices hitting 12-year lows this week, it’s been a rocky ride for companies operating in both sectors.

However, there was finally some respite for shareholders yesterday with the trading giant Glencore rebounding from its record low of 238.5p on Thursday to jump 11.95p to 252.55p. The company generates about 40 per cent of its earnings from copper, which enjoyed its largest one-day gain for four months – having been “oversold”, in the words of one trader.

The price of Brent crude also rose $2 to $50 a barrel after the West’s energy watchdog forecast that the market downtrend would end. Energy stocks rallied, led by BP, which rose 20.75p to 413.35p, BG Group, up 32.1p to 852.5p, and Anglo American, which climbed 40p to 1,099.5p.

Overall, the FTSE 100 recovered from an early fall to close up 51.49 points at 6,550.27, as investors and traders digested the Swiss central bank’s decision to abandon a three-year cap on the value of the franc.

Chris Beauchamp, market analyst at IG, said: “Oil’s rebound today has set BP and Tullow Oil also rallying, with the former helped significantly by legal developments in the US that have seen the firm’s potential liabilities significantly reduced. With the fall in copper prices paused for now, miners have taken the chance to move higher.”

In the financial services sector, Partnership Assurance found itself under pressure again after it shelved plans to dip into the bond markets just over a week after it revealed it had appointed Bank of America Merrill Lynch and Royal Bank of Scotland to hold exploratory meetings with fixed-income investors.

Partnership specialises in selling so-called impaired annuities to people who are ill or smoke. But it has been struggling since George Osborne gave savers more freedom with their pensions in March’s Budget. Its shares tumbled 8.5p to 125.25p.