Daily market update: FTSE 100, gold, Haleon, Rio Tinto

“The FTSE 100 was lower on Wednesday after selling resumed in the US overnight with airlines and miners among those taking a step back,” says AJ Bell Investment Director Russ Mould.

“Investors will be keenly awaiting the Federal Reserve’s meeting later today. The central bank is widely anticipated to keep rates on hold. There will be considerable interest in what it has to say about the US economy after recent downbeat consumer sentiment readings and bleak projections from the OECD.

“The Fed’s room for manoeuvre is restricted by current trade-related uncertainty and sticky inflation, but it will want to avoid the dreaded stagflation combination of a weak economy and rising prices.

“A fifth straight month of increased exports would in ordinary times be cause for celebration in Japan given its reliance on selling its goods and services overseas but the suspicion may be that the latest increase is being driven by stockpiling amid concern about the new US administration’s trade policy. That suggests some sales have been brought forward, potentially leading to a leaner period in a month or two’s time.

“There was widespread selling of Turkish assets after one of the main political rivals to incumbent leader Recep Tayyip Erdoğan, and current mayor of Istanbul, Ekrem Imamoğlu was arrested. Markets reacted accordingly by pricing in an escalation in political risks.

“Amid concerns over global trade and the geopolitical situation, gold continues to make new highs, now comfortably ahead of the $3,000 mark. Eye-catchingly, the price of the precious metal has roughly doubled since the start of this decade.

“Consumer healthcare firm Haleon achieved an important milestone as Pfizer sold the remainder of its stake. With its other former parent GSK having cut its ties last year, Haleon is now ready to strike out on its own without any overhang.

“Shareholders will hope the company can build on the modest gains it has eked out since its demerger in 2022 but a challenge for the company behind Aquafresh toothpaste and Nicorette tablets is maintaining brand loyalty as consumers trade down thanks to pressures on household spending.

“Compass was the biggest faller on the FTSE 100 after suffering at the hands of a double broker downgrade. BNP Paribas Exane moved from ‘outperform’ to ‘underperform’, a rating shift that knocked the share price for six.”

Rio Tinto

“Rio Tinto couldn’t be any clearer — it doesn’t want to turn its back on the UK and have a single corporate structure in Australia.

“Various shareholders have put pressure on Rio Tinto ever since rival miner BHP moved from having two parent companies and two share prices into one under a unified corporate structure. In doing so, BHP gave up its place in the FTSE 100 as it was no longer eligible for UK indices.

“Fiddling around with stock listings has become an obsession for many investors. Some think it’s a ticket to getting a higher valuation, others believe it is a simple cost-saving exercise. Fundamentally, if something isn’t broke, there is no need to try and fix it.

“Rio Tinto has a big chunk of its shareholders holding UK-listed stock and a completely different tax profile to BHP.

“Rio Tinto’s effective commitment to the UK stock market will be a big relief to the London Stock Exchange. The UK market has a long history with the natural resources sector and losing another big name from the FTSE 100 would mean the blue-chip index giving up part of its key identity.”

These articles are for information purposes only and are not a personal recommendation or advice.