The FTSE 100 retreated today despite continued positive economic news, including rising commodity prices and a strong pound. Although it could be too early to draw any firm conclusions.
“The FTSE 100 started Wednesday modestly on the back foot after UK inflation figures from which it was difficult to take anything tangible,” says AJ Bell investment director Russ Mould.
“With consumption artificially depressed by lockdown there’s not a lot for the data crunchers to work with, though there are some signs that the widely anticipated increase in prices is starting to come through,” Mould added.
It was yet another day of promising news coming from the mining industry, as Rio Tinto announced a record dividend on the back of surging commodity prices. British American Tobacco recorded better than expected results as the cigarette manufacturer faces ongoing challenges.
FTSE 100 movers
Mining giants Rio Tinto (3.63%) and Antofagasta (3.39%) took the lead at the top of the FTSE 100, closely followed by Rolls-Royce (2.36%).
At the other end, Hargreaves and Lansdown (-6.84%), British American Tobacco (-5.84%) and M&G (2.62%) are the day’s biggest fallers so far on the FTSE 100.
Rio Tinto
Rio Tinto revealed a record $6.5bn final dividend as well as announcing new long-term carbon emission targets. Following the global economy’s ongoing recovery from worldwide lockdowns, Rio has benefited from a sustained rally in commodity prices, particularly iron ore, allowing the company to payout a generous dividend.
British American Tobacco
The FTSE 100 company outperformed expectations in 2020, announcing a pre-tax profit of £8.67bn, up nearly 10% from £7.91bn in 2019. While British American Tobacco expects the pandemic to continue to affect its performance, the company is well on track to achieve yearly cost savings of £1bn by 2022.
The savings will be reallocated to fund investments in new categories, according to the company’s chief executive, Jack Bowles.
