FTSE 100 close: London bluechip index falters after weak trade data from China
London’s premier FTSE 100 index closed lower on Tuesday 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 this morning 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.
“The Chinese economy continues to splutter and that’s bad news for a FTSE 100 chock full of companies which are closely tied to its fortunes,” AJ Bell’s investment director Russ Mould said.
“China has been trying to move to being an economy driven by domestic consumption but the level of support provided to households during Covid and the country’s particularly stringent and long-lasting Covid restrictions didn’t match up to those seen in the West.
“Expecting a big wave of ‘revenge spending’ was always likely to be a forlorn hope,” Mould commented.
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.
Assets under management and administration fell to £495.7bn, down from £500bn at the beginning of this year.
“Most key measures were very slightly weaker than expected, with the various pressures on the business (persistent net outflows, sticky costs) not significantly easing in the period,” analysts at Numis wrote.