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FTSE 100 Live: Stocks slip into red; Prudential, GSK climb

Published 28/08/2024, 09:59
© Reuters FTSE 100 Live: Stocks slip into red; Prudential, GSK climb
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Proactive Investors -

  • FTSE 100 dips into red
  • Water firms warn of failure over bill cap
  • Prudential (LON:PRU) hit after interim profit slumps

Copper drops, miners fall back

Following gains earlier on in the week, miners fell back on Wednesday as “lingering concerns” around Chinese demand persisted, according to AJ Bell analysts.

This saw copper fall 1.4% to US$4.24 a pound, with iron ore trading flat after optimism earlier in the week on news Chinese stockpiles had depleted appeared to peter out.

Antofagasta PLC (LON:ANTO) led the FTSE 100’s losers on Wednesday as a result, falling 3.2%, followed by the likes of Anglo American (LON:AAL) and Rio Tinto (LON:RIO) PLC.

These weighed down the FTSE 100 come mid-morning, which slipped into the red at 1 point down following a rise earlier on.

RAC calls for 6p cut to petrol price

Calls have emerged for forecourt prices to be cut as petrol is sold for 6p more a litre than it should currently be worth, according to RAC.

The motor group said an average price of 142p was far ahead of the 103p a litre wholesale value last week, with a coinciding drop in oil and strengthening of the pound meaning drivers should be paying less at the pump.

“The biggest retailers’ refusal not to reduce their prices to fairer levels is continuing to cost drivers dear,” RAC policy head Simon Williams said.

Accounting for a retailer margin, petrol should still be closer to 136p and diesel at 139p against its average current price of 147p, RAC added.

“While the Competition and Markets Authority has clearly stated drivers were overcharged last year, it’s blatantly apparent from our data that this problem is persisting,” Williams continued.

“If prices don’t fall dramatically in the next week or so, we believe the government and the CMA should get all the biggest retailers together to demand an explanation.

“Tough action needs to be taken to change this as drivers are losing out badly every time they fill up.”

Hochschild slumps following interims

Hochschild Mining (LON:HOCM) slumped and took the place of the FTSE 250’s biggest faller on Wednesday, despite a seemingly positive set of interims.

Revenue climbed 25% to US$391.7 million over the first half of the year, the firm reported, while adjusted earnings jumped 78% to US$177.1 million.

This came as the company enjoyed a “perfect storm” of record high gold prices, falling costs and optimised production, according to eToro analyst Adam Vettese.

Hochschild did warn of delays at its Mara Rosa site though, but said better-than-expected production at Inmaculada should offset this.

Investors seemed unconvinced, however, with shares falling 5.7% following the update.

Prudential at mercy of turnaround in Asia - analysts

Prudential PLC's results clearly show the life insurer is in the hands of a wider economic turnaround in Asia, analysts have said.

The FTSE 100 listed firm reported a drop in interim profit from US$947 million to US$182 million on Wednesday, largely driven by lower investment returns.

However, following Prudential’s shift to the Asian life sector, eToro analyst Mark Crouch noted the refocus was realistically to blame.

“Inflationary pressures and higher interest rates have acted as a constant drag throughout that period,” he acknowledged.

“Yet it is Prudential's heavy exposure to Asia, where consumer demand has been severely shaken post-pandemic, that is the primary reason behind the insurer's dismal performance.”

Consistent new business profit, which ticked up 1%, could be among positives to take from the update, Crouch added, alongside a recently announced US$2 billion share buyback.

Richard Hunter, of interactive investor, added held guidance showed Prudential was "beginning to deliver against its own stretching strategic objectives" in a promising turn.

“Ultimately [Prudential] will require a swift and significant turnaround in the Asian and specifically the Chinese economy to recover,” though, according to Crouch.

“However, with growing concerns looming over China's property sector, it's uncertain whether or not that recovery is close at hand.”

Shares fell early on before regaining ground.

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