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London open: Miners drag FTSE 100 into the red
Mining stocks were leading UK markets lower in early deals on Monday as renewed concerns about China’s economy dampened sentiment.
By 0835 in London, the FTSE 100 was down 0.3% at 7,504.04.
Stocks in Asia fell sharply overnight on the back of renewed concerns about China’s property sector. Hong Kong’s Hang Seng Index slumped 1.8% after Chinese developer Country Garden announced it was suspending the trading of 11 onshore bonds. The news follows a warning last week from the company that it expects to lose $7.6bn in the first half of 2023.
In the US, data on Friday showed that producer price inflation unexpectedly picked up last month – a cause for concern for economists who had hoped that a possible slowdown in price growth may prompt the Federal Reserve to pause hiking interest rates at its next meeting.
However, Goldman Sachs predicted over the weekend that the Fed is unlikely to hike rates again this year. In fact, the bank reckons that the first rate cut will take place in the second quarter of 2023.
No major economic data is scheduled for release on Monday. Eyes are now turning to UK consumer price inflation figures due out on Wednesday, which are expected to show that annual price growth softened from 7.9% to 6.7% in July, with prices falling 0.5% month-on-month.
Commodity stocks provide a drag
Mining stocks were the morning’s worst performers, with Rio Tinto, Anglo American and Antofagasta providing a drag on the FTSE 100 early on, as sentiment was dampened by newsflow out of China. Oil peers Shell and BP were also lower.
Retailers Frasers Group, JD Sports Fashion and B&M European Value Retail were among the best performers.
Plus500 gained after announcing $120m of shareholder returns through a first-half dividend and new share buyback programme. The contract-for-difference platform also said that, despite “quieter market conditions”, it expects 2023 results to be in line with current forecasts.
Shares in precious metals explorer and miner Hochschild Mining jumped after the company gave positive updates on its Volcan Gold Project in Chile. Chief executive officer Ignacio Bustamante said updated estimates confirm that Volcan “is a large resource capable of generating significant annual gold production with substantial margins at today’s gold prices”.
Shaftesbury Capital gained after announcing a new 10-year loan of £200m from Aviva Investors.
Domain registry and internet services provider CentralNic rose after giving an upbeat outlook as it delivered an impressive set of first-half results, with revenues rising by nearly a fifth.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | +1.34% | +18.40 | 1,389.40 |
| 2 |  |
Tui Ag | +1.05% | +6.00 | 577.00 |
| 3 |  |
Hargreaves Lansdown Plc | +0.86% | +6.80 | 794.60 |
| 4 |  |
Marks And Spencer Group Plc | +0.84% | +1.70 | 204.00 |
| 5 |  |
Admiral Group Plc | +0.72% | +16.00 | 2,223.00 |
| 6 |  |
Imperial Brands Plc | +0.72% | +13.00 | 1,821.00 |
| 7 |  |
Smurfit Kappa Group Plc | +0.70% | +22.00 | 3,148.00 |
| 8 |  |
Coca-cola Hbc Ag | +0.70% | +16.00 | 2,303.00 |
| 9 |  |
Crh Plc | +0.53% | +24.00 | 4,577.00 |
| 10 |  |
Whitbread Plc | +0.51% | +18.00 | 3,517.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Persimmon Plc | -2.57% | -29.00 | 1,100.50 |
| 2 |  |
Ocado Group Plc | -1.95% | -16.20 | 816.00 |
| 3 |  |
Itv Plc | -1.71% | -1.26 | 72.52 |
| 4 |  |
Fresnillo Plc | -1.66% | -9.00 | 531.60 |
| 5 |  |
Anglo American Plc | -1.30% | -28.00 | 2,123.00 |
| 6 |  |
Bhp Group Limited | -1.23% | -28.50 | 2,289.00 |
| 7 |  |
Glencore Plc | -1.15% | -5.10 | 439.60 |
| 8 |  |
Prudential Plc | -1.12% | -11.30 | 997.20 |
| 9 |  |
Rio Tinto Plc | -1.05% | -49.50 | 4,676.50 |
| 10 |  |
Carnival Plc | -0.96% | -11.50 | 1,189.00 |
Monday newspaper round-up: Tourist VAT, cost-of-living, consumer confidence, strikes
New spending figures have laid bare the damage inflicted on the retail sector’s competitiveness by the government’s post-Brexit tourist tax. After the introduction of VAT on overseas spending, shops in London are struggling to capitalise on a post-Covid uplift in travel as the higher duty encourages visitors to divert to Paris and other European cities. – The Times
The Army is struggling to hire cyber security experts amid intense competition from business, its recruitment chief has admitted. Richard Holroyd, managing director of Defence and Security at Capita, which handles recruitment for the Armed Forces, said it was having difficulty attracting candidates given the wealth of jobs on offer. – Telegraph
The cost of some basic food items such as cheese, butter and bread has soared by more than 30% in the last two years, forcing poorer households to “make desperate choices between keeping up with their bill payments or putting food on the table,” campaigners have said. Food price inflation has slowed in recent months, but costs remain much higher than they were two years ago, disproportionately affecting low-income households, according to research by consumer body Which? shared exclusively with the Guardian. – Guardian
Britain is missing out on four fifths of the benefits of technological innovation because it does not recognise the value of manufacturing, a new government adviser has warned. Scott White, the chief executive of Pragmatic, a Cambridge-based semiconductor business, said Britain had “suffered” over the past few decades because it had not recognised the value of the production process. – The Times
Consumer confidence continues to decline as soaring mortgage rates hit household finances. Confidence, which had been improving since the aftermath of the mini-Budget, slid for the second month in a row in July, according to polling by YouGov and the Centre for Economics and Business Research (Cebr). – Telegraph
About 3.9m working days have been lost to industrial action in the past year, more than at any point since the 1980s, according to a new analysis. The Resolution Foundation, which focuses its research on low- to middle-income households, said many of the strikes were “fuelled” by anger among public sector workers over real-terms pay declines, which amounted to an average cut of more than 9% since 2021, adjusted for inflation. – Guardian
