Left Menu
Development News Edition

UPDATE 2-FTSE 100 plunges to 6-month low on China's trade threat

Reuters | London | Updated: 15-08-2019 22:43 IST | Created: 15-08-2019 22:41 IST
UPDATE 2-FTSE 100 plunges to 6-month low on China's trade threat
Image Credit: StoryBlocks

London's FTSE 100 tumbled to a six-month low as China's warning to counter the latest U.S. tariffs fanned trade tensions, while the more domestically focused midcap index fared better in comparison, amid investors' hopes of averting a no-deal Brexit. The FTSE 100 index shed 1.1%, lagging its European peers, with losses led by oil majors and financial stocks.

Shell, the largest company on the index by market value, was the biggest drag with a 3.2% drop as the stock traded ex-dividend, while crude prices also fell. While the FTSE 250 index earlier hit a near seven-month low, the index clawed back some of the early losses to close 0.5% lower on the back of a rise in sterling.

Gains for the local currency was brought on by news that the opposition Labour Party was mounting a bid to bring down Prime Minister Boris Johnson and stop him taking Britain out of the EU without a deal. However, global trade tensions were very much in play after China vowed retaliation against the latest U.S. tariffs on $300 billion of Chinese goods. The fears were briefly kept in check earlier in the week when the Trump administration delayed tariffs on some of the goods.

China's reaction on Thursday dragged an index of miners down 2% to its lowest since January over concerns about global demand amid the painful trade war. Blue-chip stocks trading ex-dividend, such as HSBC and pension buyout specialist Phoenix Group also weighed on the index, while fears of a recession persisted with the Gilt yield curve remaining inverted on Thursday.

"That (drop in financial stocks) isn't a surprise given the compression in the UK government bond yields, and bank's profitability is usually hit in lower interest rate environments," CMC Markets analyst David Madden said. Both UK indexes had incurred steep losses in the previous session as investors rushed to dump risky assets after the 10-year bond yields fell below two-year equivalents for the first time since the financial crisis.

If losses hold, the FTSE 100 would suffer its biggest monthly fall in more than seven years. Utilities and tobacco stocks British American Tobacco and Imperial Brands eked out gains as investors rushed to the so-called defensive stocks.

A warning from Asda, the British supermarket unit of retail giant Walmart, that Brexit uncertainty was affecting its customers took down shares in Just Eat, Sainsbury's and Tesco. Among midcaps, online trading platform Plus500 surged 9.6% after some of its top executives bought shares in the company.

Kaz Minerals slumped 15% after the miner took a cautious stance on the short-term outlook for the copper market amid concerns over the prolonged Sino-U.S. trade war and a slowdown in China. AIM-listed Burford Capital, the litigation financing specialist caught in a stand-off with short-seller Muddy Waters, jumped 13% after it appointed a new finance chief.

Also Read: FTSE 100 braces for worst month in 4 yrs on recession fears



Pandemic must be impetus, not obstacle, for clean water access

To make matters worse, there are suspicions that the inadequacy of wastewater treatment methods in California, the rest of the USA, and indeed around the world may help to propagate the disease even more widely. ...

3D printing and the future of manufacturing post COVID-19

The on-demand, customizable, and localized manufacturing of product components facilitated by 3D printing has the potential to redefine manufacturing but there are certain technical, mechanical, and legal limitations that, unless ...

How UK’s 'best prepared' healthcare system failed to gauge COVID-19

The UK is proud of their public health system and its unlike any other country as around 90 percent of British public supports the founding principles of National Health Service. But without accurate data being available to stakeholders in ...

Poor on IHR capacity progress in 2019, WHO says Cambodia tops COVID-19 response

Despite being in proximity to Hubei, the original epicenter of COVID-19 pandemic, Cambodia has reported just 226 confirmed cases and zero deaths. After seeing the data, WHO appreciated Cambodias healthcare information system but experts dou...


Latest News

Rajasthan Cong MLAs demand action against Pilot, rebel MLAs

Rajasthan Congress MLAs have demanded action against Sachin Pilot and other rebel MLAs at the Congress Legislature Party meeting yesterday, said sources. According to sources, State Congress in-charge Avinash Pandey has said that he will no...

Rugby-Waratahs' attacking threat was always bubbling under the surface: Newsome

The attacking verve shown by the New South Wales Waratahs in their rout of the Queensland Reds at the weekend had been bubbling away under the surface all season, winger Alex Newsome said, they just had to find a way to tap into it. The War...

'Congratulations and well done': Anupam Kher congratulates friend Satish Kaushik on completing 41 years in Bollywood

Actor Anupam Kher on Monday congratulated good friend and film director Satish Kaushik as he completed 41 years in the industry. Happy 41st anniversary of coming to Mumbai, wrote the 65-year-old star Kher on Twitter as he shared a post by K...

FOREX-Dollar struggles to sustain rally, eyes bond yields

The U.S. dollar was struggling to keep a rare rally together on Monday as its longest losing streak in a decade left much of the market structurally short of the currency and vulnerable to a squeeze on any upbeat news. Bears were caught out...

Give Feedback