U.S. stocks edged lower; Q2 GDP rose more than expected, Nvidia disappoints
Investing.com -- British stocks slipped on Wednesday after trading higher on Tuesday, led by earnings movers including Prudential and JD Sports, while Hochschild slumped after a disappointing guidance update.
The blue-chip index FTSE 100 and the British GBP/USD both dropped 0.1%. The GBP/USD is at 1.3464.
DAX index in Germany slipped 0.2%, the CAC 40 in France gained 0.7%.
U.K. energy bills to rise as Ofgem increases price cap
U.K. households will face higher energy costs this winter after energy regulator Ofgem announced a 2% increase in the price cap starting October.
The increase, which will be in effect from October through December, will add approximately £2.93 per month or £35.14 annually to the average household on a default tariff. A typical monthly bill will rise to £102, up from £100, Ofgem said.
Despite the upcoming increase, the new cap of £1,755 for typical annual costs remains £625 or 26.3% lower than its peak at the beginning of 2023 during the energy crisis. When adjusted for inflation, it is 0.9% lower than the same period last year.
Ofgem attributed the rise primarily to higher electricity balancing costs, which will contribute about £1.23 per month to bills.
Rio Tinto restructures into three divisions to streamline operations
Rio Tinto Ltd (ASX:RIO) has announced a major restructuring plan that will organize its business into three main divisions as part of efforts to simplify operations and focus on its most profitable assets.
The mining giant will consolidate its operations into Iron Ore, Aluminium & Lithium, and Copper divisions. Matthew Holcz has been named chief executive of the iron ore unit, which will integrate the company’s Western Australian operations with its Canadian business and the Simandou project in Guinea upon completion.
Jérôme Pécresse will head the Aluminium & Lithium division, which combines Atlantic and Pacific aluminium activities with the recently acquired Arcadium Lithium business. The Copper division will continue under the leadership of Katie Jackson, with a strategic focus on increasing production from the Oyu Tolgoi mine.
Prudential shares rise after strong H1 results, $5 billion buyback plan
Prudential PLC (LON:PRU) shares traded higher on Wednesday after the insurer posted first-half results that exceeded market expectations and announced plans to return more than $5 billion to shareholders over the next three years.
The London-listed insurance group reported an Annual Premium Equivalent of $3.29 billion, which came in slightly above the analyst consensus estimate of $3.27 billion.
JD Sports sees deeper sales slump in Q2 as U.K. market struggles
In other UK business news, JD Sports Fashion PLC (LON:JD) reported a steeper decline in second-quarter underlying sales, with like-for-like sales falling 3% in the 13 weeks to August 2, compared to a 2% drop in the first quarter.
The retailer, which generates almost 40% of its revenue in the US through various chains including JD Sports and Shoe Palace, saw sales decline across most markets.
The UK market was particularly weak with a 6.1% drop, while North America and Europe posted declines of 2.3% and 1.1% respectively. Asia Pacific was the only region showing growth, with a modest 0.3% increase. For the first half of the year, overall sales fell 2.5%.
Hochschild slashes gold production outlook, raises cost guidance
Meanwhile, Hochschild Mining PLC (LON:HOCM) slumped over 12% after it lowered its full-year production outlook over disappointing output from its Mara Rosa mine in Brazil.
The company now expects just 35,000-45,000 ounces of gold from the site in 2025, less than half of its earlier forecast of 94,000-104,000 ounces.
The mining company reduced its overall attributable production guidance to 291,000-319,000 gold equivalent ounces, down from 350,000-378,000 previously. Cost expectations were raised to $1,980-$2,080 per ounce from $1,587-$1,687.
Debenhams growth lifts Boohoo results
In the retail sector, Boohoo Group PLC (LON:DEBS) shares gained 7.3% after reporting £41.6 million in adjusted EBITDA for FY25. The company is exploring a potential sale of PrettyLittleThing as part of its restructuring efforts.
The Debenhams brand was a standout performer, growing GMV by 34% year-on-year to £654 million and delivering adjusted EBITDA of £25 million, a £14 million improvement from the previous year.
Frasers Group buys minority stake in We Do Play
Frasers Group PLC (LON:FRAS), the British sportswear and fashion retailer, has expanded into the leisure activity sector by acquiring a minority stake in We Do Play.
The company said the partnership offers synergies with its existing portfolio, which includes the Sports Direct retail chain. Financial terms of the investment were not disclosed.