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London bluechip index falters after weak trade data from China
by cityam
LONDON’s premier FTSE 100 index closed lower yesterday after data from China showed that its attempts to recover from the pandemic have continued to stall.
The bluechip FTSE 100 index closed 0.4 per cent lower at 7,527.42 while the FTSE 250 slipped 0.1 per cent to end at 18,843.79.
The falls came after new figures out yesterday showed that exports contracted 14.5 per cent in July while imports dropped 12.4 per cent. The fall in exports was the fastest since the start of the pandemic in early 2020.
The figures indicate that domestic demand is not as high as authorities would like it to be as the world’s second largest economy struggles to recover from the Covid lockdowns.
AJ Bell analyst Russ Mould said “ex- pecting a big wave of ‘revenge spending’ was always likely to be a forlorn hope” in the country.
Miners including Anglo American, Antofagasta and Rio Tinto were all trading lower as China is a major importer of commodities Fellow miner Glencore was also trading down after it saw a steep fall in profits on the back of falling commodity prices. Its shares were down 2.8 per cent.
The FTSE 100 company posted a more than 50 per cent decline in earnings year-on-year, which plummeted from $18.9bn to $9.4bn, with revenues steeply falling 20 per cent from $134.4bn to $107.4bn.
Also falling was fund manager Abrdn, which slumped 9.2 per cent to hit the bottom of the FTSE 100 after posting a drop in value of assets under management.
Superdry has struggled amid the squeeze in consumer spending over the last year, cutting its full year profit forecast in January. However, despite an anticipated loss of £16m in its full year results, analysts said the group’s cost saving programme would likely “underpin a return to profitability”. Peel Hunt maintained its buy rating and 200p target price.
Reverbations From China Hit Ftse 100
Virgin Money’s margins last week remained stable, with Richard Branson’s bank stating that it expects to deliver a £175m share buyback at its end of year results. Peel Hunt analysts said “operating trends were broadly consistent with existing guidance.” They retained their buy rating but reduced the target price from 246p to 243p.
