London close: Stocks slip on renewed China concerns

by | Aug 14, 2023

(Sharecast News) – London’s stock markets experienced a marginal dip at the close of trading on Monday, with both the FTSE 100 and FTSE 250 indices ending in the negative.
The FTSE 100 declined 0.23%, settling at 7,507.15, while the FTSE 250 saw a decrease of 0.2%, closing at 18,761.43.

Market watchers attributed the downward shift to rising concerns over China’s economic health which, combined with the absence of any fresh economic data, led investors to adopt a more conservative stance in trading.

On the currency front, sterling was last up 0.06% on the dollar to trade at $1.2704, while it advanced 0.25% against the euro to change hands at €1.1622.

“Despite starting the week on the back foot on account of a weak Asia session, and concerns over the Chinese real estate market, European markets tried to rally in early trading, but have spent the day struggling for gains as they look to recover some ground after two weeks of losses,” said CMC Markets chief market analyst Michael Hewson.

“The FTSE 100 especially has struggled, slipping back due to weakness in basic resources, energy, and the real estate sector, with mining and energy stocks sliding back on concern over Chinese demand.

“Crude oil prices appear to have hit a short-term peak, sliding back on concern over Chinese demand, as have copper prices which have slipped to their lowest levels since 30 June, dragging on Shell, BP, Glencore, and Rio Tinto.”

Hewson said the concerns over large Chinese real estate firm Country Garden had grown in recent days after it missed a bond payment, as worries over souring loans returned to the fore, over fears that it could be the tip of a big iceberg.

“Last year it was Evergrande which spooked markets and this year – with Country Garden following suit, concerns are growing that another failure could see ripple effects beyond property.

“UK housebuilders are also feeling discomfort on rising evidence that landlords are starting to sell-up, with rising capital gains receipts pointing to some capitulation in the housing market, which in turn could put downward pressure on prices in the coming months.”

Mining giants dip amid China concerns; retail and luxury stocks shine

Mining conglomerates, specifically Anglo American, Fresnillo, Glencore, and Rio Tinto, found themselves in negative territory, reflecting losses of 3.58%, 2.81%, 2.45%, and 1.67% respectively.

The downtrend was largely attributed to ongoing apprehensions related to China – a significant consumer of global commodities.

Oil magnates Shell and BP weren’t immune to the downward trend either, recording losses of 0.93% and 0.96% respectively.

Their drops mirrored the decrease in Brent crude, which registered a decline of around 0.6%.

Elsewhere, the property market also displayed signs of struggle with Persimmon leading the losses at 3.01%, followed by Taylor Wimpey at 1.06% and Barratt Developments at 0.88%.

On the upside was B&M European Value Retail, which surged 3.01% after Deutsche Bank raised its target price for the retailer from 610p to 680p.

The financial institution cited the potential benefits B&M could gain from troubles at Wilko – a privately-held discount chain that entered administration last week.

Interested parties had been informed of a deadline of Wednesday to present takeover bids for Wilko.

The retail sector more broadly continued its positive stride, with JD Sports Fashion climbing 2.2%, while Next and Frasers Group saw gains of 0.99% and 0.69% respectively.

Watches of Switzerland soared by 6.36% on the back of analysis by Shore Capital Markets, which suggested potential benefits from Tapestry’s $8.5bn acquisition of Capri, the parent of luxury brands Versace and Jimmy Choo.

The broker noted that the takeover set the stage for a renewed luxury competitor in the US market, aiming to combine affordability with an American flair.

In the financial sector, contracts-for-difference platform Plus500 was in focus after reporting a 43% dip in half-year profits due to reduced customer engagement and weaker trading volumes.

However, in an effort to boost shareholder confidence, the company announced the launch of a $60m share buyback, leading to a 0.98% increase in its stock value.

Reporting by Josh White for

Market Movers

FTSE 100 (UKX) 7,507.15 -0.23%
FTSE 250 (MCX) 18,761.43 -0.20%
techMARK (TASX) 4,339.17 -0.19%

FTSE 100 – Risers

B&M European Value Retail S.A. (DI) (BME) 554.00p 3.01%
Airtel Africa (AAF) 119.00p 2.94%
JD Sports Fashion (JD.) 146.45p 2.20%
Coca-Cola HBC AG (CDI) (CCH) 2,326.00p 1.71%
Hargreaves Lansdown (HL.) 801.20p 1.70%
Legal & General Group (LGEN) 233.10p 1.30%
Admiral Group (ADM) 2,234.00p 1.22%
GSK (GSK) 1,386.00p 1.09%
Pershing Square Holdings Ltd NPV (PSH) 3,000.00p 1.01%
Next (NXT) 6,968.00p 0.99%

FTSE 100 – Fallers

Ocado Group (OCDO) 796.20p -4.33%
Anglo American (AAL) 2,074.00p -3.58%
Entain (ENT) 1,270.00p -3.24%
Persimmon (PSN) 1,095.50p -3.01%
Fresnillo (FRES) 525.40p -2.81%
Glencore (GLEN) 433.80p -2.45%
Abrdn (ABDN) 182.50p -2.41%
Flutter Entertainment (CDI) (FLTR) 14,020.00p -2.20%
Rio Tinto (RIO) 4,647.00p -1.67%
Croda International (CRDA) 5,460.00p -1.23%

FTSE 250 – Risers

Watches of Switzerland Group (WOSG) 744.50p 6.36%
CLS Holdings (CLI) 130.00p 3.17%
Wetherspoon (J.D.) (JDW) 680.00p 3.11%
TBC Bank Group (TBCG) 2,795.00p 2.95%
Auction Technology Group (ATG) 734.00p 2.95%
IWG (IWG) 169.40p 2.67%
Dunelm Group (DNLM) 1,185.00p 2.16%
FDM Group (Holdings) (FDM) 594.00p 2.06%
Domino’s Pizza Group (DOM) 407.00p 1.90%
TUI AG Reg Shs (DI) (TUI) 580.00p 1.58%

FTSE 250 – Fallers

W.A.G Payment Solutions (WPS) 92.00p -4.17%
Energean (ENOG) 1,143.00p -3.30%
Capita (CPI) 20.24p -3.16%
Savills (SVS) 882.00p -2.76%
Ferrexpo (FXPO) 82.70p -2.71%
Crest Nicholson Holdings (CRST) 202.00p -2.51%
Jupiter Fund Management (JUP) 101.20p -2.50%
Liontrust Asset Management (LIO) 632.00p -2.47%
Telecom Plus (TEP) 1,632.00p -2.28%
Mobico Group (MCG) 81.70p -2.16%

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