London pre-open: Stocks to fall despite better-than-expected China data

by | Sep 7, 2021

London stocks were set to fall at the open on Tuesday following gains in the previous session, despite the release of better-than-expected Chinese trade data.
The FTSE 100 was called to open 17 points lower at 7,170.

CMC Markets analyst Michael Hewson said: “Markets in Europe look set to give up some of the gains from yesterday when they open later today, with the main focus set to be on the latest German ZEW survey for September.

“In August this survey saw a sharp drop from 63.3 in July to 40.4, and despite the recent rise in the DAX back close to the 16,000 level is expected to see a further decline to a 17-month low of 30.3 later today, as investors become more cautious ahead of this month’s German election.”

Data released earlier out of China showed the unadjusted trade surplus rose to $58.3bn in August from $56.6bn in July, coming in above consensus expectations for a decline to $53.2bn.

Export growth rose to 25.6% year-over-year from 19.3% in July, which was ahead of consensus expectations for a slowdown to 17.3%. Meanwhile, import growth increased to 33.1% y/y in August from 28.1% the month before, versus expectations for a slowdown to 26.9%.

In corporate news, DS Smith said trading was continuing to strengthen due to high demand for its boxes despite rising transportation and energy costs.

The packaging company said it had excellent volume growth in the past four months and had made good progress in recovering higher production costs by raising prices. Box volumes rose very strongly compared with a year earlier and the same period in 2019, the FTSE 100 group said.

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