The FTSE 100 dipped to its lowest level since July on Monday, on the back of growing fears over energy bills after wholesale gas prices have soared. Big losses in Asian markets helped deepen the gloom too. London’s top index ended the day down 0.8%%, at 6,908 points, after a late really. Earlier in the day, the Footsie had fallen 1.9% to a low of 6,828 points.
Some smaller energy firms fear going bust now. But in the FTSE 100, the financial sector took much of the day’s hit. Amid a sea of red, Lloyds Banking Group fell 3.8%, with Barclays down 4.1% and Standard Chartered losing 6.6%. Insurance firms suffered along with the banks, as Admiral lost 3.7%, while Aviva fell 3.3%.
The mining sector also suffered, amid a big commodities sell-off. The trigger, it appears, came from China’s promise to work to stabilise commodity prices. The Anglo American share price fell 4.8%, with Antofagasta down 3.2% and Glencore dropping 3.7%.
Monday’s biggest fall
The biggest FTSE 100 loss of the day came from Prudential, with a whopping 7.9% fall. The crunch coincides with the firm’s plan to raise £2bn through a new listing in Hong Kong, details of which were released Monday. The company has only just completed the disposal of its US business, Jackson Financial Inc.
The new listing, amounting to up to 5% of its issued share capital, hammers home the Pru’s shifting focus towards the Chinese sphere. Various global defence bigwigs are banging their drums over China’s growing influence. And a lot of institutional investors don’t much like this kind of move.
FTSE 100 winners
Not all investors saw red on Monday, as a small number of FTSE 100 stocks posted gains. International Consolidated Airlines stormed to the top of the leader board with a monster jump of 11%.
We heard nothing specific from the company on the day. But IAG had told the Sunday Times that it is not planning any new equity raise. Chief executive Luis Gallego told the newspaper that “We do not see the necessity to do a rights issue and are not considering it.”
The update comes soon after easyJet‘s new £1.2bn rights issue led to a share price crash for the budget airline. So that’s a big fear removed from IAG shareholders. It’s not out of the woods yet, mind, as the company is still in talks with banks regarding “different options.”
The optimism spread to Rolls-Royce Group too, whose shareholders enjoyed a rare 4.3% gain on the day.
AstraZeneca, meanwhile, saw its shares gain 6% as the company announced a success for its breast cancer drug Enhertu. In tests, the firm said, the drug reduced the risk of disease progression or death by 72% for HER2-positive metastatic breast cancer. It’s nice to see pharmaceuticals news that’s not related to Covid-19 for a change.
Despite these few winners, only 16 stocks posted gains, and the day belonged to the FTSE 100’s fallers. There might be some nice buys among them.
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Alan Oscroft owns shares of Aviva and Lloyds Banking Group. The Motley Fool UK has recommended Admiral Group, Barclays, Lloyds Banking Group, Prudential, and Standard Chartered. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.