UPDATE 1-Rising HK tensions drag Asia-exposed UK stocks
UK's main stock index fell sharply on Monday as a violent day of protest in Hong Kong knocked on Asia-exposed financial stocks, while investors waited for UK economic growth numbers. The FTSE 100 slid 0.6% by 0906 GMT, handing back nearly all the gains accumulated in the previous week when hopes of a U.S.-China trade deal lifted sentiment.
The FTSE 250 index, dominated by more domestically focused firms, dipped 0.2% as a 10% surge by baker Greggs after it forecast earnings ahead of expectations helped limit losses. Bluechips HSBC, Prudential and China-exposed miners all slipped around 2% after news that Hong Kong police shot and wounded one protester as pro-democracy unrest continued into its 24th week.
"If the situation deteriorates further, it will not only drag local equities lower but the region as a whole. That's the kind of reaction we're seeing today," Hussein Sayed, Chief Market Strategist at FXTM, said. Furthermore, data showing China's producer prices fell the most in more than three years in October amid its trade war with the United States worsened sentiment on Monday.
Stock markets across the world had welcomed signs of de-escalation in the protracted trade spat between Washington and Beijing, with many traders hoping to see a deal this month. But some of the cheer evaporated after President Donald Trump said on Friday that he had not agreed to rollbacks of U.S. tariffs sought by China.
Ahead of Britain's December election, a warning from Moody's that it may cut the country's sovereign debt rating spoiled risk appetite ahead of GDP numbers. Moody's said neither of the main political parties was likely to tackle high borrowing levels that Brexit had made even harder to fix.
Investors turned to defensive stocks, considered less risky at times of macroeconomic uncertainties, leaving tobacco companies Imperial Brands and British American Tobacco among a handful of risers on the main index. Drugmaker AstraZeneca eked out a 1% gain following positive safety data on its anemia drug roxadustat.
Among smaller-cap stocks, fertilizer maker Sirius Minerals jumped 12.1%, after earlier surging nearly 40%, as the company produced a revised development plan for its North Yorkshire polyhalite project.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)