Investors flocked to safe-haven assets amid turmoil in the banking world.
Gold producer stocks were in high demand as stocks across the Footsie were hit hard by the fallout surrounding Silicon Valley Bank (SVB).
Among those that weathered the storm were Endeavor Mining which was up 4.2%, or 70p, at 1,720p, Mexican miner Fresnillo gained 3.5%, or 25.2p, at 747.4p, Centamin rose 5.3%, or 5.35p, to 107.25p and Pan African Resources jumped 9.9%, or 1.3p, to 14.42p.
Collapse: Gold producer stocks were in high demand as stocks across the Footsie were hit hard by the fallout surrounding Silicon Valley Bank
Outside of gold, there were also gains for water supplier United Utilities (up 1.3%, or 13p, to 1044.5p), consumer goods group Reckitt Benckiser (in up 0.2%, or 10p, to 5,760p) and energy company National Grid (up 1.3%, or 14p, to 1,064p). It painted a stark contrast to the sell-off that dragged down London-listed lenders.
In a dismal start to the week, the FTSE 100 fell 2.6%, or 199.72 points, to 7,548.63 and the FTSE 250 fell 2.8%, or 532.38 points, to 18,825.08 . London’s blue-chip index fell to a two-month low as a sea of red swept across global equity markets.
In Europe, the main benchmark in Germany fell by 3% and the French Cac fell by 2.9%.
But Wall Street bucked the trend, with the Dow Jones Industrial Average up 0.08%, the S&P 500 up 0.2% and the Nasdaq up 0.8%.
AJ Bell chief investment officer Russ Mold said: “There is cause for concern whether it is the conflict in Ukraine, inflation, rising interest rates , and now a potential banking crisis has been added to the mix.” Small surprise, people feel a little scared.
Back in London, Direct Line suffered a loss as the insurer blamed soaring inflation for driving up the cost of car repairs.
It made a loss of £45.1m for 2022 after making a profit of £446m the previous year. Gross written premiums fell 3.2% to £2.97bn last year.
Stock Watch – Sleep Cap
The nightcap remained in good spirits after enjoying young revelers enjoying the evenings despite a wave of train strikes.
A bumper festive period saw the bar owner’s income rise by 48.7% to £23.5m in the six months to January 1.
This came even as train strikes – mainly on Thursdays and Saturdays – affected the most important weekly trading days.
It hit sales, which fell 5.8% from the same period a year earlier.
Shares were flat at 11 p.m.
Like others in the industry, Direct Line has also been affected by weather claims. He paid £149m in weather-related claims last year – his highest payout since the band floated in 2012 – and well above his £73m budget.
The December freeze alone resulted in around £95million in claims. The group reiterated that its dividend balance for 2022 will be scrapped. The shares fell 4.8%, or 8.1p, to 159.55p.
Home builders also faced a big decision after the deadline to sign the government contract to fix the unsafe buildings they developed.
Barratt Developments, Bellway, Crest Nicholson, Redrow, Persimmon, Taylor Wimpey and Vistry all said yesterday they will set aside funds to cover the cost of removing hazardous coatings.
The government has warned there will be ‘significant consequences’ for homebuilders who refuse to register or follow set conditions.
Bellway has set aside £513.7m, Barratt has budgeted £427.2m, Persimmon believes he will have to spend £350m and Taylor Wimpey has given a slightly lower figure of £245m sterling.
Shares of Barratt Developments fell 1.7%, or 7.4p, to 430.7p, Bellway fell 2.6%, or 54p, to 2045p, Crest Nicholson fell 1.7%, or 3 .8p, to 223.2p, Redrow fell 2.8%, or 13.2p, to 457.4p, Taylor Wimpey lost 1.2%, or 1.35p, to 114.45p, Persimmon sank 1 .3%, or 15.5p, to 1,222.5p and Vistry slipped 2.6%, or 20p, to 757.5p.
British American Tobacco traded lower after JP Morgan downgraded the cigarette maker’s rating to ‘neutral’ from ‘overweight’ and cut the target price to 3100p from 3600p. Shares fell 3.2%, or 100p, to 3,013.5p.
There was better news for cruise giant Carnival after P&O Cruises experienced its best wave period with record bookings made between December 15 last year and March 6. But the shares fell 7.7%, or 57.2p, to 687.2p.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.
