FTSE 100 surges to over 4-year high; insurance stocks tumble
By Shashwat Chauhan and Johann M Cherian
(Reuters) - UK's exporter-heavy FTSE 100 closed higher on Wednesday, buoyed by gains in commodity-linked stocks, while insurer Direct Line plunged to the bottom of the mid-cap index after cancelling its final dividend for 2022.
The blue-chip FTSE 100 advanced 0.4%, its highest since August 2018, while the more domestically focused FTSE 250 gained 0.7%.
The FTSE 350 nonlife insurance index housing Direct Line and Admiral dropped 23.5%, its biggest fall in six months, after the insurer scrapped its final dividend for 2022 following a surge in claims.
"Saving money by not paying a dividend is one way to preserve cash, yet the thousands of pensioners owning the stock (Direct Line) for income won't be happy," said Russ Mould, investment director at AJ Bell.
"Direct Line has historically been a generous dividend payer and a lot of people have got used to a growing stream of cash rewards from the business."
Meanwhile, Industrial metal miners gained 0.7% as copper prices jumped, while hopes of new mining opportunities through a partnership between the kingdom of Saudi Arabia and the UK government further supported the sector. [MET/L]
A surge in energy prices also pushed Shell and BP 1.2% and 0.7% respectively. [O/R]
The commodity-heavy FTSE 100 has had a bright start to the year so far, rising for five of the previous six trading sessions, after it outperformed major global peers in 2022 as commodity prices jumped.
Among other company news, JD Sports topped the FTSE 100 after the clothes and footwear retailer reported a jump in total revenue growth for the six weeks in the run-up to Christmas.
Darktrace slumped 14.6% after the cyber-security firm cut its revenue forecast as prospective customers turned more reluctant to run product trials.
Reach Plc slumped 26% after it said its annual operating profit would miss market expectations on weak digital and print advertising.
(Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips, Shailesh Kuber, William Maclean)