Sector movers: Mining stocks track commodity prices lower on stronger US dollar

5th Nov 2014 14:14

Mining stocks missed out on the wider equity-market rally on Wednesday as commodity prices declined on the back of a stronger dollar, following upbeat US economic data and a Republican victory in the mid-term elections.Precious-metal miners such as Fresnillo, Petropavlovsk, African Barrick Gold and Randgold were among the worst performers in the resources sector in afternoon trade as gold prices slumped, along with Egyptian producer Centamin after cutting its forecast for annual production.Other heavyweights in the category such as Antofagasta, Anglo American, BHP Billiton and Vedanta were also out of favour.The dollar rose against most of its major counterparts after ADP data showed that the US private sector added more payrolls than expected in October.The currency was also supported by the Republicans taking control of both chambers of Congress, raising hopes for less political gridlock in Washington.Meanwhile, the greenback surged against the yen to its highest level in seven years, partly reflecting dovish comments from the governor of the Bank of Japan who said that the central bank is ready to take more measures to hit inflation targets.Gold prices dropped to a four-year low of $1,137.10 an ounce on Wednesday.A stronger US currency makes dollar-denominated commodities like gold more expensive to holders of other currencies and less attractive for those looking for an alternative investment.The worry now for gold companies is that the gap between market prices and production costs is becoming very narrow, with further downside meaning that miners risk selling the commodity at a loss.Meanwhile, iron-ore prices were at their lowest since 2009 as demand hopes eased after steel mills in China were ordered to cut back on production. Top performing sectors so far todayFood Producers & Processors 7,733.32 +4.16%Food & Drug Retailers 2,581.40 +2.90%Mobile Telecommunications 4,691.27 +2.50%Construction & Materials 3,732.83 +2.21%General Retailers 2,695.82 +1.85%Bottom performing sectors so far todayMining 14,920.07 -0.26%Industrial Metals & Mining 1,285.93 -0.01%