London open: Stocks slump as miners, Prudential suffer heavy losses
London stocks slumped in early trade on Monday following a downbeat session in Asia, dragged lower by weakness in the mining sector and heavy losses for Prudential.
At 0840 BST, the FTSE 100 was down 1.2% at 6,883.09, trading below the 7,000 mark for the first time since July.
Richard Hunter, head of markets at Interactive Investor, said: "Rattled investors are currently succumbing to risk aversion, as a series of concerns weighs on sentiment.
"The persistence of the Delta variant, elevated inflation, supply chain blockages and raw material price increases are combing to form a toxic cocktail which is seeing optimism evaporate. At the same time, slowing growth generally has been highlighted by the current weakness in China, while in the US concerns around corporate tax hikes are weighing on the prospects for future profitability. With the third quarter reporting season edging ever closer, it seems increasingly unlikely that companies will able to match the strength displayed in the previous quarter.
"In opening exchanges, the UK markets reflected the current wariness, propelled by further falls in the Hong Kong market, although without direction from the closed Japan and China indices. Even in its absence China’s impact was felt on the FTSE 100, with further weakness in mining stocks as well as companies with a higher exposure to the region, such as Prudential, Standard Chartered and Burberry."
In equity markets, Prudential slid 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".
Energy group SSE was in focus as it said 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.
On the upside, British Airways and Iberia owner IAG was the top performer on the FTSE 100 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.
Travel stocks more generally were on the rise, with Tui and easyJet also higher after the government announced on Friday that Covid testing rules for double-jabbed travellers will be relaxed.
Elsewhere, AstraZeneca gained after the pharmaceuticals company said a new breast cancer drug reduces the risk of disease progression or death.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 153.90p 2.94%
AstraZeneca (AZN) 8,248.00p 2.29%
Unilever (ULVR) 3,956.50p 0.98%
Polymetal International (POLY) 1,330.00p 0.87%
GlaxoSmithKline (GSK) 1,391.00p 0.20%
Avast (AVST) 575.60p 0.10%
Sainsbury (J) (SBRY) 282.60p 0.07%
Reckitt Benckiser Group (RKT) 5,862.00p 0.00%
Rightmove (RMV) 729.40p -0.11%
Meggitt (MGGT) 735.20p -0.16%
FTSE 100 - Fallers
Prudential (PRU) 1,358.50p -6.02%
Anglo American (AAL) 2,457.50p -5.15%
Johnson Matthey (JMAT) 2,584.00p -3.51%
Ocado Group (OCDO) 1,642.00p -3.41%
Glencore (GLEN) 316.35p -3.32%
Intermediate Capital Group (ICP) 2,105.00p -3.26%
Standard Chartered (STAN) 428.10p -3.14%
Barclays (BARC) 177.00p -3.13%
Rio Tinto (RIO) 4,690.50p -2.88%
Antofagasta (ANTO) 1,367.00p -2.88%
FTSE 250 - Risers
TUI AG Reg Shs (DI) (TUI) 311.50p 2.91%
easyJet (EZJ) 639.80p 1.49%
Cineworld Group (CINE) 64.38p 1.32%
Harbour Energy (HBR) 365.00p 0.94%
TR Property Inv Trust (TRY) 490.50p 0.93%
Grainger (GRI) 312.40p 0.84%
Indivior (INDV) 209.20p 0.77%
Dechra Pharmaceuticals (DPH) 5,165.00p 0.68%
Cairn Energy (CNE) 172.60p 0.64%
Petropavlovsk (POG) 20.92p 0.58%
FTSE 250 - Fallers
BlackRock World Mining Trust (BRWM) 498.00p -4.23%
Ferrexpo (FXPO) 310.20p -4.02%
Fidelity China Special Situations (FCSS) 315.00p -3.96%
Moneysupermarket.com Group (MONY) 231.40p -3.82%
AO World (AO.) 235.00p -3.69%
Hochschild Mining (HOC) 140.00p -3.45%
Ninety One (N91) 256.00p -3.40%
Reach (RCH) 375.50p -3.35%
Sirius Real Estate Ltd. (SRE) 127.80p -3.33%
Hammerson (HMSO) 32.16p -3.31%