London stocks had nudged into the red by midday on Wednesday, as investors weighed up a further loosening of Covid restrictions in China against disappointing Chinese trade data and recession fears.
The FTSE 100 was down 0.1% at 7,515.5, reversing earlier small gains.
Data out earlier showed that China’s dollar-denominated exports in November fell 8.7% year-on-year to $296bn, compared with a decline of 0.3% in October.
Forecasts had been for a 1.5% drop. Imports fell 10.6% on an annualised basis to $226.2bn, a sharp decline from growth of 0.7%in October. Analysts expected a 4.16% decline for the month compared to a year ago.
China’s trade surplus came in at $69.84bn, lower than a forecast for $78.1bn.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Fears are growing that economies are in for a rough time ahead as feverish inflation and the bitter interest rate medicine being used to bring it down take effect. Worries deepened amid warnings from US banking and media sectors that navigating through the storm would not be easy, while the latest data has shown China’s trade has been sideswiped by a drop in global demand and zero-Covid policies. Despite today’s easing of restrictions, it’s clear China’s Covid nightmare is not at an end.
“The world’s second largest economy is being hit by a toxic combination of its strict pandemic policies which have crushed domestic sentiment and the severe inflationary headwinds overseas affecting its shipments to countries.”
On home shores, the latest survey from lender Halifax showed that house prices suffered their biggest monthly decline in November since the global financial crisis in October 2008, amid rising mortgage rates.
House prices fell 2.3% on the month following a 0.4% drop in October, with the average price of a house standing at £285,579, down from £292,406. On the year, meanwhile, prices rose 4.7% in November, down from 8.2% growth the month before.
Kim Kinnaird, Director of Halifax Mortgages, said: “The market may now be going through a process of normalisation. While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023.”
In equity markets, GSK surged after a US court ruled in the pharmaceutical company’s favour in a case claiming that its former Zantac heartburn drug caused cancer. Haleon, which was recently spun off from GSK, also jumped.
Mitchells & Butlers racked up strong gains after the pub chain said it swung to a full-year profit despite a challenging backdrop.
Elsewhere, commercial vehicle rental provider Redde Northgate rose after it said that full-year results would be “modestly above” market views, as it posted a rise in interim profit and revenue, underpinned by fleet growth and new contract wins.
On the downside, online greeting card and gift retailer Moonpig tumbled as it said that interim profits had halved and warned that trading conditions had become progressively more challenging through October and November as it cut its annual sales forecast.
Online advertising group Baltic Classifieds was also sharply lower even as it reported a rise in interim profits, driven by all its business units.
In broker note action, Persimmon was weaker after a downgrade to ‘hold’ at Investec, while PageGroup was knocked lower by a downgrade to ‘underperform’ at Jefferies.
Johnson Matthey fell after a downgrade to ‘underweight’ at JPMorgan and Wood Group was down after Citi cut its rating to ‘neutral’.
Market Movers
FTSE 100 (UKX) 7,515.52 -0.08%
FTSE 250 (MCX) 19,020.18 -0.42%
techMARK (TASX) 4,422.83 1.04%
FTSE 100 – Risers
GSK (GSK) 1,498.80p 8.00%
Haleon (HLN) 310.40p 5.15%
Ocado Group (OCDO) 688.40p 3.96%
Dechra Pharmaceuticals (DPH) 2,746.00p 2.46%
Smith & Nephew (SN.) 1,088.00p 1.49%
Compass Group (CPG) 1,926.50p 1.47%
InterContinental Hotels Group (IHG) 4,818.00p 1.35%
AstraZeneca (AZN) 11,300.00p 1.35%
Convatec Group (CTEC) 229.60p 1.32%
Relx plc (REL) 2,347.00p 1.29%
FTSE 100 – Fallers
Prudential (PRU) 1,048.50p -2.60%
Harbour Energy (HBR) 301.80p -2.42%
Glencore (GLEN) 543.20p -2.32%
Ashtead Group (AHT) 4,954.00p -2.25%
BP (BP.) 466.25p -1.77%
Rolls-Royce Holdings (RR.) 91.85p -1.75%
Shell (SHEL) 2,317.50p -1.74%
Standard Chartered (STAN) 582.00p -1.66%
Anglo American (AAL) 3,270.50p -1.62%
BT Group (BT.A) 118.45p -1.54%
FTSE 250 – Risers
Mitchells & Butlers (MAB) 150.70p 6.13%
Indivior (INDV) 1,770.00p 5.86%
Redde Northgate (REDD) 392.50p 5.09%
Ferrexpo (FXPO) 168.50p 3.76%
Hikma Pharmaceuticals (HIK) 1,552.00p 2.24%
Drax Group (DRX) 629.00p 2.03%
SSP Group (SSPG) 227.10p 1.93%
Spectris (SXS) 3,221.00p 1.83%
Domino’s Pizza Group (DOM) 290.80p 1.75%
Herald Investment Trust (HRI) 1,798.00p 1.70%
FTSE 250 – Fallers
Moonpig Group (MOON) 131.90p -12.76%
Wood Group (John) (WG.) 124.60p -3.60%
Baltic Classifieds Group (BCG) 139.60p -3.46%
Tullow Oil (TLW) 39.12p -3.41%
Bridgepoint Group (Reg S) (BPT) 190.00p -3.41%
Fidelity China Special Situations (FCSS) 229.50p -3.37%
Pagegroup (PAGE) 451.80p -2.80%
Weir Group (WEIR) 1,709.50p -2.59%
Serco Group (SRP) 165.60p -2.30%
Essentra (ESNT) 236.50p -2.27%
