Blue-chips in London, Paris and Frankfurt were in the red midday Tuesday, as investors fretted over the outlook for China’s economy after some less-than-stellar data.
‘Chinese exports grew at a slower pace in November versus October, and imports shrank. That doesn’t install much confidence about Beijing’s efforts to get the country back on top. The prospect of higher tariffs on Chinese goods exported to the US once Donald Trump is back in the White House also cast a dark cloud on the near-term outlook, making investors nervous about the region,’ AJ Bell analyst Dan Coatsworth commented.
The FTSE 100 index traded down 42.87 points, 0.5%, at 8,309.21. The FTSE 250 was down 79.58 points, 0.4%, at 20,969.68, and the AIM All-Share was down 1.75 points, 0.2%, at 739.10.
The Cboe UK 100 was 0.5% lower at 833.70, the Cboe UK 250 was also down 0.5% at 18,456.16, and the Cboe Small Companies was down 0.1% at 16,313.99.
The CAC 40 was down 0.5% in Paris. The DAX 40 in Frankfurt was up marginally, however.
Stocks in New York were called mostly higher. The Dow Jones Industrial and Nasdaq Composite are called up 0.1% and the S&P 500 flat.
Chinese President Xi Jinping warned Tuesday that a trade war with the US would result in ‘no winners’, state media said, ahead of next month’s inauguration of president-elect Donald Trump.
The former US president unleashed a gruelling trade war with China during his first term in office, lambasting alleged intellectual property theft and other ‘unfair’ practices.
Xi also said during Tuesday’s meeting that China had ‘full confidence’ of achieving its 2024 growth goal, state media reported.
Chinese exports rose in November at a slower rate than expected while imports shrunk further, official data showed Tuesday, reinforcing the need for more support a day after top officials pledged to bolster the stuttering growth.
Exports jumped 6.7% on-year to $312.3 billion last month, China’s General Administration of Customs said. The reading was much slower than the 8.7% anticipated by economists in a Bloomberg survey and well down from the 13% leap in October, which was the strongest in more than two years.
Question marks over China’s outlook sent shares in Asia-focused insurer Prudential 1.9% lower. Miner Glencore, also exposed to the ebbs and flows of the Chinese economy as the Asian nation is a major buyer of minerals, lost 1.8%.
The pound faded to $1.2759 early Tuesday afternoon, from $1.2785 at the time of the London equities close on Monday. The euro declined to $1.0531 from $1.0576. Against the yen, the dollar rose to JP¥151.69 from JP¥151.19.
Ashtead plunged 13%. The industrial equipment supplier cut its annual outlook and plotted a move to a New York primary listing.
It now guides for group rental revenue growth of 3% to 5% for the full-year, its outlook cut from 5% to 8%. Rental revenue in the half-year to October 31 rose 6%. Overall revenue climbed 2%.
Ashtead believes ‘the US market is the natural long term listing venue’. Shifting its primary listing to the US from London ‘is in the best interests of the business and its stakeholders’. It still plans to keep a UK listing.
‘Today Ashtead is substantially a US business, reporting in US dollars, with almost all the group’s operating profit (98% in FY24) derived from North America, which is also the core growth market for the business. The group’s executive management team and operational headquarters are based in the US and the vast majority of the group’s employees reside in North America,’ Ashtead said.
Moonpig shed 12%. It reported a swing to a half-year loss amid tough trading conditions in its Experiences arm. The greeting cards seller and gifting firm backed annual guidance, however. Moonpig’s pretax loss in the six months to October 31 amounted to £33.3 million, swinging from profit of £18.9 million a year prior.
Revenue rose 3.8% on-year to £158.0 million from £152.1 million. Hurting its bottom line, however, Moonpig booked an impairment of goodwill worth £56.7 million, as it now predicts ‘a longer timeline for fully realising the revenue growth potential of Experiences’.
‘Moonpig Group current trading remains in line with our expectations. Growth has been underpinned by consistent strong sales and orders at Moonpig and is supported by steady progression at Greetz. Given ongoing macro headwinds in gifting, trading remains challenging at Experiences and we remain focused on delivering our transformation plan. Accordingly, our expectations for full year revenue remain unchanged,’ Moonpig said.
‘Our business is well positioned to deliver sustained growth in revenue, profit and free cash flow, driven by our continued focus on data and technology. With respect to the medium-term, we continue to target double digit percentage annual revenue growth.’
Moonpig announced a maiden interim dividend of 1.0 pence per share.
NCC was the worst FTSE 250 performer after it warned lengthening sales cycles would mean modest revenue growth in the current financial year. The stock plunged 18%.
The Manchester-based cybersecurity firm said pretax loss widened to £27.5 million in the 16 months to September 30 from £4.3 million in the 12 months to May 31, 2023.
NCC, which recently changed its year-end, said revenue rose 28% to £429.5 million in the 16 months from £335.1 million in the 12 months. On a comparable basis revenue fell 3.2% to £324.4 million in the 12 months to May 2024.
Chief Executive Mike Maddison that the firm is currently experiencing a ‘lengthening of sales cycles’ in line with the wider market.
NCC said clients are looking for higher levels of assurance during their procurement processes, a ‘longer buying cycle’ related to longer-term contracts while security leaders are competing for budget with other spending priorities in their organisations.
Elsewhere in London, Begbies Traynor added 5.3%. The professional services consultancy reported improved half-year earnings and sees an annual outturn in line with market expectations.
In the six months to October 31, revenue improved 16% to £76.3 million from £65.9 million a year prior. Pretax profit surged 57% to £4.7 million from £3.0 million.
‘The group’s financial performance in the first six months underpins the board’s confidence in delivering current market expectations for the full year, which will extend our strong financial track record of growth,’ Begbies said.
A barrel of Brent fell to $71.74 early Tuesday afternoon from $72.43 at the time of the London equities close on Monday. Gold traded at $2,672.74 an ounce, rising from $2,669.43.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
