Earnings are improving for resource companies

The outlook is turning more positive for resource stocks which have so far this year underperformed the rest of the UK market. The realisation of the internet's impact on traditional businesses has been demonstrated in the stock market this year in the feeding frenzy for "new economy" businesses. Traditional industries - including resources - have been significantly derated. So far the mining group has fallen 26% below the All-Share's average P/E ratio of 27.9 times and oils are 40% down. Margaret McLaren, investment director at Britannic Asset Management, says: "The fundamentals are ve...