Stock prices in London finished lower on Monday, with the FTSE 100 index down amid fears that the Chinese property sector is weakening.
The FTSE 100 index closed down 59.92 points, 0.8%, at 7,623.99. The FTSE 250 ended down 191.53 points, 1.0%, at 18,415.31, and the AIM All-Share closed down 4.91 points, or 0.7%, at 734.52.
The Cboe UK 100 ended down 0.9% at 760.21, the Cboe UK 250 closed down 1.5% at 16,045.10, and the Cboe Small Companies ended up 0.1% at 13,596.02.
‘China is set to go down in history as being 2023’s biggest disappointment for investors. Having started the year in everyone’s good books amid expectations of a big economic rebound, the Asian superpower has failed to deliver. Economic growth has become a struggle compared to the levels it generated a decade ago and government stimulus initiatives have lacked bite,’ said Russ Mould, investment director at AJ Bell.
‘The property sector has been at the centre of the country’s troubles and it’s going from bad to worse.’
Shares in Chinese property developer Evergrande plummeted Monday, after announcing that it would be unable to carry out a restructuring plan intended to guarantee its survival.
The news heightened fears around China’s already fragile property market crisis and weighed on market sentiment as concerns of a global spill-over grew. China has the world’s second-largest economy.
On the back of the news, China-exposed stocks were among the worst performers in the FTSE 100.
Luxury fashion company Burberry lost 4.8%, while Asia-focused bank Standard Chartered closed down 0.2%. Insurer Prudential, which is also Asia-focused, fell 2.6%.
Miners were also losing down, with both Rio Tinto and Anglo American closing down 2.0%, and Endeavour Mining finishing down 1.2%
Risk appetite has also been hit by central banks, hinting that interest rates have not yet peaked.
On Wednesday last week, the US Federal Reserve left its benchmark interest rate at a 22-year high but signalled it still expects one more hike before the end of the year and fewer cuts than previously indicated next year.
‘The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’s goals,’ the Fed warned.
The pound was quoted at $1.2211 at the London equities close Monday, down compared to $1.2267 at the close on Friday. The euro stood at $1.0589 at the European equities close Monday, down against $1.0664 at the same time on Friday.
‘The ’higher for longer’ interest rate theme has been instrumental in lifting the value of the USD across the board since July. This outlook had gone hand in hand with the resilient tone of US economic data,’ analysts at Rabobank commented.
Against the yen, the dollar was trading at JP¥148.81, higher compared to JP¥148.22 late Friday.
In the FTSE 100, CRH rose 5.0%, making it the best performer on the index on Monday.
It confirmed its primary listing has now transferred to the New York Stock Exchange following approval from the Irish High Court. The company’s shares on the London Stock Exchange now move to a standard listing from a premium listing.
Entain was the worst performer in the FTSE 100, however, losing 12%.
The Ladbrokes owner reported that its online net gaming revenue has been weaker than expected during the third quarter of the year as it suffered from regulatory headwinds and unfavourable sporting results hurting its margins.
Nonetheless, Entain reiterated its expectation for full-year earnings before interest, tax, depreciation and amortisation to be within the range of £1.0 billion and £1.05 billion. This would be up from £993.2 million in 2022.
Entain dragged fellow-FTSE 100 gambling firm Flutter down 3.5%. In the FTSE 250 index, William Hill owner 888 closed down 6.8%.
Elsewhere in London, Westmount Energy jumped 32%.
It noted an announcement by Argos Resources, regarding the completion of an acquisition by JHI Associates of the North Falklands Basin production licence, PL001.
The oil and gas investing company said PL001 is located in the North Falklands Basin, immediately to the west of the giant Sea Lion discovery. It covers a total area of 1,126 square kilometres.
Saietta lost 26%.
The Bicester, England-based engineering firm said pretax loss for the year ended March 31 widened to £23.8 million from £11.3 million a year prior. However, turnover grew by 40% to £6.0 million from £4.3 million the year before.
In European equities on Monday, the CAC 40 in Paris ended down 0.9%, while the DAX 40 in Frankfurt ended down 1.0%.
Stocks in New York were mixed at the London equities close. The DJIA was down 0.1%, the S&P 500 index up 0.2% and the Nasdaq Composite up 0.3%.
Brent oil was quoted at $91.44 a barrel at the London equities close Monday, down from $92.32 late Friday. Gold was quoted at $1,918.62 an ounce at the London equities close Monday, lower against $1,927.93 at the close on Friday.
In Tuesday’s UK corporate calendar, engineering firm Smiths Group will announce its full-year results. Asos will also issue a trading statement, while Card Factory will publish half-year results.
The economic calendar for Tuesday has the US house price index and consumer confidence index.
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