MARKET REPORT: Investors back safe haven assets amid SVB turmoil

Investors rushed to safe havens amid the banking turmoil.

Shares in gold producers were in high demand as stocks across the Footsie suffered from the fallout around Silicon Valley Bank (SVB).

Among those able to weather the storm was Endeavor Mining, which rose 4.2 percent or 70 pence to 1720 pence, Mexican miner Fresnillo 3.5 percent or 25.2 pence to 747.4 pence, Centamin rose 5.3 percent, or 5.35 pence, to 107.25 p and Pan African Resources rose 9.9 percent, or 1.3 pence, to 14.42 pence.

In addition to gold, there were also gains for water supplier United Utilities (+1.3 percent, or 13 pence, to 1044.5 pence), consumer goods group Reckitt Benckiser (plus 0.2 percent, or 10 pence, to 5760 pence) and energy company National Grid (up 1.3 percent, or 14p, to 1064p). It was a stark contrast to the sell-off that swept London-listed lenders with it.

In a dismal start to the week, the FTSE 100 fell 2.6 percent, or 199.72 points, to 7548.63 and the FTSE 250 fell 2.8 percent, or 532.38 points, to 18825.08. The London blue-chip index fell to a two-month low as a sea of ​​red swept across global stock markets.

In Europe, the main benchmark in Germany was down 3 percent and the Cac in France was down 2.9 percent.

But Wall Street bucked the trend, with the Dow Jones Industrial Average up 0.08 percent, the S&P 500 up 0.2 percent and the Nasdaq up 0.8 percent.

AJ Bell investment director Russ Mold said: “There’s plenty to worry about whether it’s the conflict in Ukraine, inflation, rising interest rates and now a possible banking crisis has been added to the mix. No wonder people are a little scared.’

Back in London, Direct Line turned loss-making when the insurer blamed rising inflation for driving up the cost of engine repairs.

It made a £45.1 million loss for 2022, having made a £446 million profit the previous year. Gross written premiums fell 3.2 per cent to £2.97 billion last year.

Stock Watch – Nightcap

Nightcap kept its spirits up after it brought in money for young revelers enjoying a night out despite a spate of train strikes.

A great festive period saw the bar owner’s turnover increase by 48.7 per cent to £23.5 million in the six months to 1 January.

This came even as train strikes – usually on Thursdays and Saturdays – hit key weekly trading days.

Sales fell by 5.8 percent compared to the same period a year earlier.

Stocks were flat at 11p.

Like others across the industry, Direct Line was impacted by bad weather claims. It paid £149 million in weather-related claims last year – the highest payout since the group went public in 2012 – and well over budget of £73 million.

The December freeze resulted in around £95 million in claims alone. The group reiterated that the final dividend for 2022 will be scrapped. Shares fell 4.8 percent, or 8.1 pence, to 159.55 pence.

Homebuilders also faced a major decision following the deadline for signing the government contract to repair unsafe buildings they were developing.

Barratt Developments, Bellway, Crest Nicholson, Redrow, Persimmon, Taylor Wimpey and Vistry all said yesterday that they will set aside money to cover the cost of removing hazardous upholstery.

The government has warned there will be “significant consequences” for homebuilders who refuse to apply or comply with the conditions set.

Bellway has set aside £513.7 million, Barratt has set aside £427.2 million, Persimmon thinks it will have to spend £350 million and Taylor Wimpey gave a slightly lower figure of £245 million.

Shares in Barratt Developments fell 1.7 per cent, or 7.4p, to 430.7p, Bellway fell 2.6 per cent, or 54p, to 2045p, Crest Nicholson fell 1.7 per cent, or 3.8p, to 223 .2p, Redrow fell 2.8 percent, or 13.2p, to 457.4p, Taylor Wimpey lost 1.2 percent, or 1.35p, to 114.45p, Persimmon fell 1.3 percent, or 15.5p, to 1222.5p and Vistry dropped 2.6 percent, or 20p, to 757.5p.

British American Tobacco traded lower after JP Morgan downgraded the cigarette maker’s rating from “overweight” to “neutral” and lowered its price target from 3,600 pence to 3,100 pence. Shares fell 3.2 percent, or 100 pence, to 3,013.5 pence.

There was better news for cruise giant Carnival after P&O Cruises had its best wave ever with record bookings between December 15 last year and March 6. But shares fell 7.7 percent, or 57.2 pence, to 687.2 pence.