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London open: Stocks fall amid China Covid woes; miners hit
London stocks fell in early trade on Monday, with miners pacing the decline amid worries about growing Covid cases in China.
At 0840 GMT, the FTSE 100 was down 0.5% at 7,351.29.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Financial markets have caught a cold amid worries that mounting Covid cases in China and a fresh tightening of restrictions will send a fresh shiver through manufacturing output and push down demand for raw materials.
“Outbreaks across the country clustering in mega cities like Beijing and Guangzhou are dashing hopes of an easing of the strict zero Covid policy. Oil has continued to march downwards, with Brent crude scuttling to around $87 dollars a barrel, after the 10% fall last week. The worsening situation is coming at a time of fears of flu outbreaks, which is putting fresh pressure on commodity stocks, with mining companies feeling more pain in trading today.”
In equity markets, miners – which are heavily dependent on demand from China – were the worst performers on the FTSE 100, with Glencore, Anglo American, Antofagasta and Rio Tinto all down.
Elsewhere, catering group Compass slumped even as it hiked its dividend and reported a rise in full-year underlying operating profit and revenues, hailing record net new business.
On the upside, Virgin Money rallied as it reported a strong rise in full-year profits driven by higher interest rates. The bank said pre-tax profit surged 43% to £595m. It also posted impairment losses of £52m, compared with a £131m credit a year ago.
Diploma was also on the front foot as it posted a jump in full-year profits and revenues.
Endeavour Mining gained after saying it had made a major discovery at its 100%-owned Tanda-Iguela greenfield exploration property in Côte d’Ivoire.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Imperial Brands Plc | +1.04% | +22.00 | 2,143.00 |
| 2 |  |
Bae Systems Plc | +0.96% | +7.40 | 777.60 |
| 3 |  |
National Grid Plc | +0.88% | +9.00 | 1,026.50 |
| 4 |  |
Astrazeneca Plc | +0.82% | +90.00 | 11,010.00 |
| 5 |  |
British American Tobacco Plc | +0.79% | +26.00 | 3,337.00 |
| 6 |  |
Gsk Plc | +0.75% | +10.20 | 1,378.60 |
| 7 |  |
Centrica Plc | +0.71% | +0.66 | 93.66 |
| 8 |  |
Vodafone Group Plc | +0.56% | +0.55 | 97.97 |
| 9 |  |
Sse Plc | +0.56% | +9.50 | 1,706.00 |
| 10 |  |
Unilever Plc | +0.56% | +22.50 | 4,063.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -4.87% | -33.00 | 645.20 |
| 2 |  |
Easyjet Plc | -2.78% | -10.80 | 377.10 |
| 3 |  |
Marks And Spencer Group Plc | -2.71% | -3.35 | 120.10 |
| 4 |  |
Compass Group Plc | -2.49% | -46.00 | 1,804.50 |
| 5 |  |
Prudential Plc | -2.37% | -23.20 | 955.40 |
| 6 |  |
Associated British Foods Plc | -2.15% | -33.00 | 1,501.00 |
| 7 |  |
Antofagasta Plc | -2.08% | -27.50 | 1,295.50 |
| 8 |  |
Halma Plc | -1.89% | -42.00 | 2,183.00 |
| 9 |  |
Melrose Industries Plc | -1.87% | -2.45 | 128.35 |
| 10 |  |
Hargreaves Lansdown Plc | -1.86% | -15.60 | 821.80 |
Monday newspaper round-up: Electricity companies, Arm, British Steel
The companies responsible for bringing electricity to UK homes have been accused of “rampant profiteering” by a leading union that is calling for the energy regulator to cap their earnings. Sharon Graham, general secretary of Unite, has written to Ofgem to ask it to clamp down on “excessive” profits generated by regional electricity distribution network operators (DNOs), which raked in £15.8bn in profits last year and have paid out £3.6bn in dividends between 2017 and 2021. – Guardian
Much-anticipated plans to list the British chip designer Arm on the stock exchange have been delayed by managers who fear the global economic downturn and a slump in tech shares could spook potential investors. The Cambridge-based company wrote to private shareholders a few days ago, saying the initial public offering (IPO), which could value the company at up to $40bn (£34bn), would not take place until well into next year. The company was widely expected to float as soon as the first quarter of next year. – Guardian
The Chinese owners of British Steel have injected only a fraction of the £1.2bn they promised to invest despite begging British taxpayers for a bailout worth hundreds of millions of pounds. Jingye, the largely unknown Chinese company that acquired British Steel almost three years ago, has pumped in just £156m since acquiring the business in a Government-supported takeover in March 2020, the Telegraph can disclose. – Telegraph
Middle earners face a fresh income squeeze as the Government examines plans for “social tariffs”, which would see the energy bills of vulnerable households subsidised through levies on bills paid by the better off. The Government plans to “develop a new approach to consumer protection in energy… including options such as social tariffs,” documents published alongside the Chancellor’s Autumn Statement show. – Telegraph
An American private equity firm that once owned a stake in Heathrow is reviving a plan to list an investment company on the London stock market that it hopes will raise £300 million to buy into infrastructure assets. The flotation will be a boost for the stock exchange, which has suffered from a slump in listings this year as investor fears about the economy have mounted and market volatility has risen. The investment company, which will be called AT85, will be managed by the Connecticut-based Astatine Investment Partners and will set out its plan to sell shares today. – The Times
