Daily market update: Centrica, Nestle, Tesla, gold and silver

“The FTSE 100 slipped in early trading on Tuesday as investors await the resumption of trading on Wall Street after yesterday’s Labor Day holiday,” says AJ Bell investment director Russ Mould.

“Tobacco, utilities and banks acted as a drag on the UK index, failing to offset strength in energy and healthcare.

“Oil stocks and precious metals miners were the main gainers in London as gold and silver prices continued to surge. Crude oil prices moved higher, with traders reacting to potential supply disruptions associated with the conflict between Russia and Ukraine.

“Asian stocks were mostly higher as investors eye a potential rate cut from the US Federal Reserve later this month.

“In focus for investors today is a scheduled Oval Office announcement from US president Donald Trump, albeit we don’t know what the news is about. There is wide-ranging speculation about the possible content of the announcement, but it’s impossible to say ahead of the speech whether it will move markets or not.

“Pressure continues to build on chancellor Rachel Reeves ahead of the upcoming Budget as the yield on the 30-year Gilt hits its highest level since 1998 at 5.7% – reflecting concern about the UK’s public finances and economic policy.

“Centrica shares powered down despite news that two nuclear power plants in which it has a 20% stake will see their lives extended by one year to boost the UK’s energy security. There may be some disappointment, however, at the lack of an extension to the expected March 2030 closure date of two of its other nuclear plants, Heysham 2 and Torness.”

Nestle

“Investors are unhappy at the departure of Laurent Freixe judging by the negative share price reaction.

“While investors might not disagree with the reasons behind Freixe’s departure, it’s hard not to ignore the fact that Nestle now has its third CEO in just two years.

“There might now be disruption to the company’s turnaround plan as new boss Philipp Navratil gets up to speed, and uncertainty as to whether he will go down the same path as his predecessor.

“Nestle has gone through a patchy period in recent years and Freixe was busy trying to refocus the company on its core strengths and making sure did them better. Freixe knew the business inside and out, and part of his work was to restore the culture that previously helped to propel Nestle to great things.

“While Navratil is also an internal appointment, he will want to put his own mark on strategy and that suggests the clock could be reset when it comes to the turnaround plan.”

Tesla

“Tesla continues to face major headwinds. Already dealing with a slump in demand in Europe, expansion into India hasn’t gone to plan.

“Reports suggest Tesla has only sold just over 600 cars in the country since making its debut in mid-July. It’s not a surprise given the country doesn’t seem ready to adopt electric vehicles on a mass scale.

“India has the same problem faced in the Western world a decade ago – limited electric charging infrastructure, which means drivers could get range anxiety and decide it’s not worth the risk switching from a combustion engine to electric just yet.

“Tariffs on imported electric vehicles also makes Tesla vehicles fairly expensive. The $70,000 cost puts these cars out of reach for many people.

“Elon Musk might be taking a calculated bet that it’s worth Tesla laying the groundwork now to get a first-mover advantage, even though sales might be limited in the near-term.”

Gold and silver

“Once again in 2025 gold prices have hit new record highs – reflecting the uncertain and volatile backdrop seen this year. Gold reached $3,508 per ounce.

“Gold has limited industrial applications and is typically in demand during periods of economic or geopolitical strife, when inflation threatens paper currencies or there are significant falls in bond and equity markets.

“Its role as a store of value goes back thousands of years and it often attracts investors at times of crisis because, unlike currencies, its value cannot be manipulated through adjustments to interest rates. Also, it is a scarce resource which is costly to mine, so it’s supply cannot be increased rapidly, unlike the supply of money.

“A key driver over the last decade or so has been buying by central banks looking to diversify their reserves out of dollars. This has been particularly evident with countries like Russia and China, who have had periods where they’ve been at odds with the US.

“A second and somewhat related catalyst coming to the fore is reduced appetite for other traditional safe havens, including US government debt. This reflects investor concern about the size of the country’s deficit and the credibility of the current trade policy. Weakness in the US dollar is another tailwind given gold is denominated in dollars.

“At the same time, geopolitical concerns remain relevant given the ongoing conflicts in the Middle East and in Ukraine. A looming interest rate cut in the US is another positive for gold given one of its drawbacks as an asset class is a lack of income.

“Silver has not yet breached the record high achieved in 2011 and notably the gold-silver ratio, while lower than the 100-plus times seen in April, is still in the 80s rather than the historical average range of 50 to 60.”