FTSE 100 weighed by concerns over China’s economic slowdown

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FTSE 100 weighed by concerns over China’s economic slowdown

The pound, meanwhile, was lower on continued Brexit uncertainty.


Investor concern over a slowdown in the Chinese economy weighed on London’s FTSE 100 index.
Investor concern over a slowdown in the Chinese economy weighed on London’s FTSE 100 index.

Commodity stocks pulled the FTSE 100 lower on Thursday after disappointing manufacturing data from Beijing triggered fears over the health of the Chinese economy.

London’s blue-chip index closed down 32.47 points, or 0.46%, at 7,074.73, while Germany’s DAX rose 0.29% and France’s CAC grew 0.4%.

David Madden, market analyst at CMC Markets, said: “The FTSE 100 is firmly in the red as a broad-based sell off in consumer, energy and mining stocks has weighed on the British index.

“China’s manufacturing PMI (Purchasing Managers’ Index) report fell further into contraction territory to 49.2 – its lowest reading since early 2016. The second-largest economy in the world is a major importer of commodities and that is a large factor in the FTSE 100’s under-performance.”

Meanwhile the pound, which has been a barometer of Brexit since the 2016 referendum, was weaker due to concerns over the Prime Minister’s ability to deliver a deal that will appeal to her Cabinet with just a month to go before Britain’s scheduled departure from the EU on March 29.

Sterling was down 0.18% against the US dollar at 1.328 and declined 0.28% versus the euro at 1.167 at the London market close.

Fiona Cincotta, senior market analyst at City Index, said: “Brexit continues to dominate sterling traders’ focus. Whilst a vote on no-deal Brexit and delaying Brexit are offering a solid floor to the pound, concerns over Theresa May’s ability to bring a more palatable deal to ministers was weighing on sentiment.

“With under two weeks to go until the meaningful vote, a Government spokesman has said there is still significant work to be done.”

In corporate news, luxury car manufacturer Aston Martin Lagonda revealed plans to set aside up to £30 million to help it weather Brexit disruption as it posted a £68.2 million annual loss.

The maker of cars favoured by spy James Bond said its board had given the go-ahead for the fund as it steps up contingency planning for a possible no-deal Brexit.

Aston Martin shares closed down 294.4p to 1,080p.

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Rolls-Royce pulled out of the race to build engines for Boeing’s new mid-sized planes as it revealed the bill for problems on its Trent 1000 turbines would rise to a mammoth £1.5 billion.

The group said it was withdrawing from the competition to power the new Boeing planes, saying it was “unable to commit to the proposed timetable”.

Rolls-Royce shares rose 27.8p to 955p.

British Airways owner International Consolidated Airlines Group (IAG) posted higher revenue and profit despite an adverse impact from foreign exchange rates and higher fuel costs.

The company reported a 6.7% increase in revenue to 24.4 billion euros (£20.88 billion) for 2018, while profit before tax rose 9.8% to 3.04 billion euros (£2.6 billion).

IAG shares were up 1.2p to 599p.

Rentokil Initial said a surge in summer call-outs for insect and rat catching helped boost annual results as last year’s heatwave sent pest numbers soaring.

The group saw a leap in call-outs for pest control across the UK and Europe in the final six months of 2018, which helped underlying sales in the division jump 10.1% higher across the continent and 4.2% higher in Britain.

Rentokil shares were up 22p to 351p.

Brent crude, the international benchmark, traded up 0.18% at 66.38 US dollars (£49.96).

The biggest risers on the FTSE 100 were Rentokil up 22p to 351p, St James’s Place up 31.2p to 972.4p, NMC Health up 86p to 2,704p, and ITV up 3.85p to 131.1p.

The biggest fallers on the FTSE 100 were easyJet down 84p to 1,227.5p, Mondi down 116.5p to 1,728.5p, DS Smith down 12.4p to 335.5p, and Wood Group down 18.4p to 520.4p.

Press Association

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