London midday: Miners pace the decline as stocks slump

by | Sep 20, 2021

London stocks had extended losses by midday on Monday following a downbeat session in Asia, dragged lower by weakness in the mining sector and heavy losses for Prudential.
The FTSE 100 was down 1.5% at 6,856.44, trading below the 7,000 mark for the first time since July.

Russ Mould, investment director at AJ Bell, said: “There’s plenty for the market to fret about and those arguing the markets were looking frothy are seeing some of that froth disappear as a brewing crisis in China, surging gas prices in Europe and concerns about stagflation combine to sink stocks.

“The ‘don’t panic’ message from the Government on energy prices is starting to sound worryingly like Corporal Jones from Dad’s Army as the UK faces a whirlwind whipped up by low levels of energy storage, huge global demand for LNG and Vladimir Putin’s machinations as the amount of gas pumped from Russia is constrained.

“The fear is that in adding to inflationary pressures it could threaten the UK’s recovery from the pandemic.

“More significant from the perspective of world markets is the concerning situation with huge Chinese property developer Evergrande which appears to be teetering on the precipice with concerns about contagion from the situation infecting the wider economy in China.

“This is particularly bad news for miners. Any downturn in China would have significant implications for commodities demand given its status as the world’s largest consumer of many minerals and metals. The situation also has uncomfortable echoes of 2015 when fears about Chinese debt prompted a big and broad-based market correction.”

In equity markets, Prudential slumped after the life insurer announced plans to raise £2bn through a public offer and international share placing on the Hong Kong Stock Exchange. The 173-year-old company said it intended to use most of the proceeds to pay down debt and give it “financial flexibility in the light of the breadth of opportunities to invest for growth in Asia and Africa”.

Moneysupermarket was under the cosh after a rating downgrade at Peel Hunt, while Wagamama owner Restaurant Group slid despite an upbeat note by Shore Capital, which reiterated its ‘buy’ stance on the shares.

On the upside, AstraZeneca was the standout gainer on the FTSE 100 after the pharmaceuticals company said a new breast cancer drug reduces the risk of disease progression or death.

British Airways and Iberia owner IAG flew higher after the company’s chief executive told the Sunday Times there are no plans for the group to follow easyJet’s £1.2bn rights issue.

Energy group SSE nudged up after saying it had made no decision on whether to split off its renewables business after reports that activist hedge fund Elliott Management was pressuring for a breakup of the firm. SSE said it would provide an update on plans to “further accelerate growth” with its interim results in November.

Market Movers

FTSE 100 (UKX) 6,856.44 -1.54%
FTSE 250 (MCX) 23,335.70 -1.37%
techMARK (TASX) 4,628.23 -0.89%

FTSE 100 – Risers

AstraZeneca (AZN) 8,314.00p 3.11%
Sainsbury (J) (SBRY) 290.30p 2.80%
International Consolidated Airlines Group SA (CDI) (IAG) 152.28p 1.86%
Polymetal International (POLY) 1,335.50p 1.29%
Unilever (ULVR) 3,962.50p 1.14%
Reckitt Benckiser Group (RKT) 5,895.00p 0.56%
Smiths Group (SMIN) 1,374.50p 0.22%
Hargreaves Lansdown (HL.) 1,427.00p 0.18%
SSE (SSE) 1,635.50p 0.06%
Croda International (CRDA) 8,968.00p 0.04%

FTSE 100 – Fallers

Anglo American (AAL) 2,356.00p -9.07%
Prudential (PRU) 1,327.00p -8.20%
Glencore (GLEN) 307.75p -5.94%
Flutter Entertainment (CDI) (FLTR) 14,470.00p -5.52%
Rio Tinto (RIO) 4,585.50p -5.05%
BHP Group (BHP) 1,780.40p -4.98%
Standard Chartered (STAN) 420.20p -4.93%
Antofagasta (ANTO) 1,341.50p -4.69%
Intermediate Capital Group (ICP) 2,084.00p -4.23%
Evraz (EVR) 561.60p -4.16%

FTSE 250 – Risers

Petropavlovsk (POG) 21.34p 2.60%
PureTech Health (PRTC) 361.00p 1.40%
Centamin (DI) (CEY) 91.02p 1.29%
Indivior (INDV) 210.00p 1.16%
Tyman (TYMN) 447.00p 1.13%
Dr. Martens (DOCS) 401.40p 1.11%
Baltic Classifieds Group (BCG) 224.00p 0.90%
Drax Group (DRX) 479.60p 0.84%
Frasers Group (FRAS) 661.50p 0.76%
Draper Esprit (GROW) 1,084.00p 0.74%

FTSE 250 – Fallers

Restaurant Group (RTN) 105.60p -8.17%
Moneysupermarket.com Group (MONY) 222.00p -7.73%
Reach (RCH) 359.00p -7.59%
Fidelity China Special Situations (FCSS) 311.00p -5.18%
Playtech (PTEC) 415.80p -4.72%
BlackRock World Mining Trust (BRWM) 496.00p -4.62%
IP Group (IPO) 135.40p -4.51%
Ashmore Group (ASHM) 349.20p -4.33%
Ferrexpo (FXPO) 309.60p -4.21%
Hammerson (HMSO) 31.90p -4.09%

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