London open: Stocks fall as miners slump; Barclays bucks trend

London stocks fell in early trade on Tuesday, with miners under pressure amid worries about China's economy, but Barclays powered ahead as investors welcomed the bank's strategic overhaul.

At 0840 GMT, the FTSE 100 was down 0.3% at 7,706.33.

Investors were mulling the latest policy announcement from China, where the PBoC kept the one-year loan prime rate (LPR) unchanged at 3.45%, as expected. However, it surprised markets by cutting the five-year LPR by 25 basis points to 3.95%. This marked the first time the five-year rate was cut since May 2023.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The fragility of China’s economy is weighing on minds as the country remains mired in a real estate slump with the latest attempt to stimulate demand highlighting the depths of the problems.

"The sharper-than-expected cut hasn’t done the trick of shoring up confidence yet. It’s concentrated minds on the collision of concerns about the economy, from real estate debts to deflation to falling foreign investment. Iron ore prices are trading around three-month lows, as hopes that demand for steel could rebound have ebbed away.

"Asian stocks dipped back again as worries continued about the economy, setting the scene for a lacklustre start to trading for the FTSE 100, with investors also mindful that high interest rates may be sticking around for longer in the United States."

In equity markets, BHP was under the cosh as annual profits at the Australian mining giant slid after it took a massive hit on its nickel operations and the financial after-effects of the 2015 Samarco dam disaster in Brazil continued to dog the company.

Miners more generally were weak as metals prices fell, with Anglo American, Rio Tinto, Antofagasta and Glencore all down.

National Express owner Mobico was in the red but off earlier lows after saying its results would be delayed by an accounting review of the German rail business. It also said an onerous contract provision was set to rise by between £40m and £70m.

On the upside, Barclays Bank surged as it reported a fall in annual earnings after fourth-quarter profits dropped by 92%, but said it plans to return at least £10bn of capital to shareholders between 2024 and 204, through dividends and share buybacks. The bank also announced a £2bn cost-cutting drive.

Kathleen Brooks, research director at XTB, said: "Barclays' strategic review was punchy, and it essentially boils down to two things: cut costs aggressively and boost profits and continue to return capital to shareholders, to the tune of £10bn by 2026.

"This is exactly the type of message that shareholders love at the moment, and it is why the market has reacted with glee on Tuesday morning."

InterContinental Hotels nudged up after full-year results, while Plus500 rallied as its full-year results came in "significantly ahead" of market expectations and the online trading platform announced plans for $175m in shareholder returns.

Domino’s Pizza gained after an upgrade to ‘buy’ from ‘hold’ at Jefferies, which lifted its price target on the shares to 430p from 410p.

Superdry rose sharply following a Sky News report that prominent US investor Davidson Kempner is among the parties being courted by founder Julian Dunkerton as he assembles an offer to take the struggling fashion chain private.

Market Movers

FTSE 100 (UKX) 7,706.33 -0.29%
FTSE 250 (MCX) 19,132.36 -0.44%
techMARK (TASX) 4,392.32 -0.17%

FTSE 100 - Risers

Barclays (BARC) 156.14p 4.79%
Aviva (AV.) 437.70p 1.72%
Frasers Group (FRAS) 848.00p 1.01%
NATWEST GROUP (NWG) 226.90p 0.84%
Auto Trader Group (AUTO) 730.80p 0.61%
Relx plc (REL) 3,423.00p 0.32%
Tesco (TSCO) 281.70p 0.21%
Shell (SHEL) 2,513.00p 0.20%
InterContinental Hotels Group (IHG) 7,924.00p 0.18%
DCC (CDI) (DCC) 5,770.00p 0.17%

FTSE 100 - Fallers

Airtel Africa (AAF) 91.25p -4.85%
Anglo American (AAL) 1,714.20p -3.59%
Fresnillo (FRES) 463.30p -2.97%
Rio Tinto (RIO) 5,285.00p -2.63%
Antofagasta (ANTO) 1,727.00p -2.15%
Glencore (GLEN) 387.15p -2.09%
Land Securities Group (LAND) 636.80p -1.30%
Beazley (BEZ) 563.00p -1.23%
Rightmove (RMV) 543.80p -1.20%
Unite Group (UTG) 991.50p -1.15%

FTSE 250 - Risers

Domino's Pizza Group (DOM) 362.00p 4.32%
Close Brothers Group (CBG) 317.40p 4.07%
Spirent Communications (SPT) 117.80p 2.79%
Plus500 Ltd (DI) (PLUS) 1,880.00p 2.68%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,350.00p 1.73%
Currys (CURY) 65.20p 1.56%
W.A.G Payment Solutions (WPS) 89.00p 1.14%
PZ Cussons (PZC) 100.80p 0.80%
NextEnergy Solar Fund Limited Red (NESF) 74.35p 0.75%
Monks Inv Trust (MNKS) 1,092.00p 0.74%

FTSE 250 - Fallers

Mobico Group (MCG) 70.70p -16.18%
Ninety One (N91) 167.20p -2.79%
C&C Group (CDI) (CCR) 150.40p -2.72%
RHI Magnesita N.V. (DI) (RHIM) 3,500.00p -2.40%
Tullow Oil (TLW) 29.90p -2.35%
Diversified Energy Company (DEC) 900.00p -2.33%
Future (FUTR) 682.00p -2.08%
Workspace Group (WKP) 501.00p -1.96%
Clarkson (CKN) 3,490.00p -1.83%
HGCapital Trust (HGT) 431.00p -1.82%