Safe-haven demand drives Randgold Resources higher

870 seconds; that’s all it took to trigger pandemonium across financial markets and drive gold prices to nine-week highs.

Randgold Resources stood alone, unscathed by the latest torrid sell-off that wiped £30bn off the FTSE 100, until afternoon trade when a couple of stock edged into positive territory.

Randgold’s shares rallied by as much as 75p, or 1.7pc, to £44.03, as panicked investors fled to safe-haven stocks after China accelerated the depreciation of the yuan and the local stock market was suspended less than half an hour after opening.

The price of gold climbed by as much as 1.5pc to $1,107.62 an ounce in intraday trading in the wake of the chaos in China. The precious metal is often seen as an alternative investment during times of geopolitical and financial uncertainty.

After many Asian-exposed stocks were left bruised last year by China-led malaise, Mike van Dulken, of Accendo Markets, said it was “no surprise to see anything with safe-haven status doing well”.

Even though China said it would suspend its stock market circuit breaker mechanism, which was introduced just five days ago to curb volatility, Mr van Dulken said there were “still plenty of factors to keep people panicked and fuel demand for precious metal stocks”.

South American gold producer Orosur Mining also ticked higher - up 8pc to 6.8p - and mid-cap Acacia Mining leapt 3.8pc to 188.2p.

On the wider market, Chinese turmoil dominated the trading session, pushing the FTSE 100 3pc lower in intraday trading to levels last seen on August 24, otherwise known as Black Monday, when a mass sell-off in equities triggered a sharp fall in global stock markets.

However, after the Asian country reneged on its circuit breaker, designed to stop market crashes and halt trading for 15 minutes when the market tumbles by more than 5pc, the blue-chip index recovered some ground to close down 119.30 points, or 1.96pc, at 5,954.08.

• China scraps emergency circuit breaker as FTSE crashes below Black Monday lows
• Is China really devaluing its currency?

Mark Dampier, of Hargreaves Lansdown, said: “The problems this week are to do with what could happen today, when a ban on short selling and other share sales bans is expected to end and investors are naturally trying to adjust their positions accordingly.”

European shares also fell sharply, with the CAC in Paris and the German DAX falling 2.3pc and 1.7pc respectively.

Back in London, it was the usual suspects that occupied the bottom of the FTSE 100. The sell-off across the mining sector accelerated amid heightened concerns about demand from the world’s top metals consumer, China. Glencore slipped 8.3pc to 78.7p, while Antofagasta was changing hands at 410.6p by close, off by 5.3pc, and BHP Billiton lost 5pc to 673.7p.

Anglo American had a torrid session, slumping 11pc to 240.7p after Barclays issued a bearish note on the FTSE 100 miner. “Time is of the essence for Anglo American”, the bank warned.

However, it acknowledged the bank’s radical restructuring plan to trim its capital expenditure and slash its workforce was “essentially the right one”.

“The lack of detail on timing and the quantum of unlocked value leave the shares vulnerable and the market appears impatient,” said Ian Rossouw, Barclays analyst.

Energy stocks were rocked by the latest slide in the price of oil. Brent crude fell by as much as 6.1pc to $32.16 a barrel in intraday trade. Joshua Mahony, an IG analyst, said: “Wednesday’s substantial drawdown of US crude inventories proved insufficient to gain any traction for oil prices and as long as China continues to fall, commodities are likely to do exactly the same.”

In the face of collapsing commodity prices, Royal Dutch Shell B shares lost 2.8pc to £14.62, while BG Group closed 1.9pc in the red at 936.9p. BP sank 1.7pc to 337.7p.

Elsewhere, emerging markets-focused Aberdeen Asset Management saw its shares fall 7.8pc to 249p.

While global markets buckled, FTSE 250 stock Home Retail Group inched 3.6p, or 2.7pc, higher to 136p after Citigroup raised its target price. The investment bank owed the move to another possible bid by Sainsbury’s, which it believes could be in the range of 135p to 165p. Analysts at the bank believe another offer is likely after the supermarket confirmed on Tuesday that it had made a possible bid approach for the retailer in November.

Marks & Spencer also nudged its way into positive territory before markets closed, after chief executive Marc Bolland informed the board he would resign in April. The news came as the retailer released another set of lacklustre trading results for the key Christmas period. The FTSE 100 stock inched 0.5p higher to 439.2p.

Elsewhere in the retail sector, Poundland found itself at the bottom of the mid-cap index after it said it expects full-year pre-tax profits to come in towards the lower end of its forecasts due to lower high street footfall and mild weather conditions in the last quarter.

Despite the disappointing results, David Jeary, of Canaccord Genuity, remained optimistic, as he pointed to benefits from the integration of the 99p Stores chain and international expansion, “with the Spanish trial seeing sales growth of just over 100pc to £4.5m”. The shares fell 12.6pc to 167.8p.

On Aim, a positive trading update helped Penna Consulting inch 8.3pc higher to 306p. In the first nine months of the year, profits jumped 51pc, compared to the previous year, buoyed by growth in the recruitment space.

Finally, investors cheered Majestic Wine after it delivered a stellar set of results during the festive season. Sales rose 7.3pc in the Christmas period, sending the shares to seven-week highs - up 29p, or 8.9pc, to 356.3p.

However, Mr Jeary, of Canaccord Genuity, warned: “The market will need to see a more sustained recovery in like-for-like sales to buy into the new Majestic retail division.”