GLNCY Glencore Plc (PK)

LONDON—Glencore PLC's roller-coaster stock-market ride continued Tuesday, with the shares falling sharply after hefty gains the day before amid management's efforts to assure investors that the commodities group remains financially robust.

Shares in the Swiss commodities trader and producer fell 7.7% to 106.15 pence a share in early morning London trading, making it the worst performer out of the U.K.'s blue chip FTSE-100 index. Meanwhile, the FTSE-350 mining index was down 2.3% and the FTSE-100 index was down 0.3%.

Glencore's shares have been pummeled by concerns that world's largest copper supplier and thermal coal exporter may struggle to safeguard its credit rating in light of its heavy debt burden, which is among the highest in the industry.

Investors are concerned about Glencore's exposure to slumping prices for many commodities given slower economic growth in China, the world's largest consumer of many commodities, and excess global supplies.

Glencore last month announced $10 billion worth of measures to reduce its net debt by about a third to around $20 billion by the end of 2016. This included scrapping its dividend, issuing $2.5 billion in new equity and selling assets. The group is also considering the sale of a stake in its agricultural unit.

Investors initially cheered the news, pushing the shares higher, but the rally turned into a new share-price slump in the following weeks. Some analysts concluded that the company would have to announce further debt-reduction measures to offset a continued slide in commodity prices, particularly in copper and coal on which Glencore is reliant for much of its earnings.

Copper was down 1% at $5,143 a metric ton on Tuesday and still hovering close to August's more-than-six year low of $4,920 a ton.

Glencore's Chief Executive and largest shareholder Ivan Glasenberg talked up the prospects of copper at a conference on Monday. In his first public appearance since the group's stock plunged at the end of last month he blamed hedge funds for artificially driving down copper prices and said the industrial metal would rebound after falling nearly 20% this year. Mr. Glasenberg, however, didn't address the crisis in confidence facing Glencore.

The company has suspended operations at two African copper mines that will remove about 400,000 tons of the metal from the market. Mr. Glasenberg said that will have a positive impact on prices.

Glencore's shares closed up almost 18% in Hong Kong on Monday after rising as much as 72% intraday, prompting the company to issue a statement in which it said it wasn't aware of any reason for such price and volume movements. Glencore's shares closed 21% higher in London on Monday.

Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

October 06, 2015 04:55 ET (08:55 GMT)

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