London close: Stocks sag after weak Chinese foreign trade data

London stocks finished in the red on Wednesday as disappointing Chinese trade data dented sentiment even as rate hike expectations on both sides of the Pond continued to mount.

By the end of trading, the FTSE 100 had yielded 0.86% to 7,237.83 and front-dated Brent was off by 4.3% to $88.54 a barrel on the ICE, alongside another big slide lower for natural gas prices.

Yet in testimony before the Treasury Select Committee, Bank of England, Phil Huw, said the government's emergency package of measures, including an energy price cap, may lower inflation in the short-term.

According to Bloomberg, economists at Barclays Research said the new Prime Minister's measures may see inflation slip to 5% by April.

For her part, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "As politicians scramble to put sticking plasters on what looks set to be a longer-term energy crisis, the outlook for the global economy has darkened again, sending fresh jitters through financial markets."

Investors were also mulling the latest comments from Russian president Vladimir Putin. According to reports, Putin has threatened to cut off energy supplies if price caps are imposed on Russia's oil and gas exports, warning the West that it would be "frozen" like a wolf's tail in a famous Russian fairy tale.

On home shores, the latest survey from Halifax showed that house prices edged higher in August, reversing July’s decline.

According to the latest Halifax House Price Index, house prices increased by 0.4% last month, compared to fall of 0.1% in July. A typical house now costs an average of £294,260, a fresh record. The annual pace of growth eased from 11.8% to 11.5%, however, the lowest level in three months.

Victoria Scholar, head of investment at Interactive Investor, said: "We are starting to see tentative signs that the boom in housing could be starting to ease off.

"With rising mortgage costs, the threat of recession, sky-high inflation and the cost-of-living crisis, transactions in the housing market are expected to cool."

In equity markets, miners were under the cosh following the release of much weaker than expected Chinese foreign data, with Glencore, Rio and Anglo all lower.

Barratt Developments fell even as it said that full-year adjusted pre-tax profit rose to a record £1.05bn as completions recovered to pre-pandemic levels. Statutory pre-tax profit was down 20.9% to £642.3m.

Retailer WH Smith lost ground despite saying it had continued to see a "strong performance" from its travel unit in the second half, with group revenue coming in "comfortably in excess" of pre-Covid levels.

On the upside, energy firms SSE and Centrica rallied after the new PM said she would took a windfall tax on energy providers off the table.

NCC was sitting pretty at the top of the FTSE 250 after an upgrade to buy at Investec.

In other broker note action, Phoenix Group was knocked lower by a downgrade to ‘underweight’ at Morgan Stanley, while pub group Mitchells & Butlers slumped after downgrade to ‘equalweight’ by the same outfit.

Market Movers

FTSE 100 (UKX) 7,237.83 -0.86%
FTSE 250 (MCX) 18,811.48 -0.05%
techMARK (TASX) 4,246.18 -0.11%

FTSE 100 - Risers

SSE (SSE) 1,753.50p 3.94%
Fresnillo (FRES) 701.00p 2.46%
Centrica (CNA) 83.54p 1.95%
Flutter Entertainment (CDI) (FLTR) 10,275.00p 1.93%
Hargreaves Lansdown (HL.) 850.20p 1.82%
Aveva Group (AVV) 2,887.00p 1.65%
Croda International (CRDA) 6,726.00p 1.51%
Admiral Group (ADM) 2,201.00p 1.48%
Melrose Industries (MRO) 137.65p 1.40%
Compass Group (CPG) 1,867.50p 1.30%

FTSE 100 - Fallers

Standard Chartered (STAN) 580.20p -4.28%
Glencore (GLEN) 468.25p -3.82%
Associated British Foods (ABF) 1,455.00p -3.61%
Vodafone Group (VOD) 110.18p -2.65%
Tesco (TSCO) 249.30p -2.58%
BP (BP.) 441.25p -2.53%
DCC (CDI) (DCC) 4,802.00p -2.36%
Kingfisher (KGF) 240.70p -2.27%
Next (NXT) 6,048.00p -2.26%
Barclays (BARC) 164.10p -2.25%

FTSE 250 - Risers

NCC Group (NCC) 219.00p 10.61%
Drax Group (DRX) 691.00p 5.98%
Auction Technology Group (ATG) 816.00p 4.88%
Trainline (TRN) 343.00p 4.32%
CMC Markets (CMCX) 227.00p 4.13%
Baltic Classifieds Group (BCG) 138.00p 3.92%
TUI AG Reg Shs (DI) (TUI) 129.70p 3.43%
TBC Bank Group (TBCG) 1,830.00p 3.39%
Carnival (CCL) 733.00p 3.04%
Molten Ventures (GROW) 336.00p 2.82%

FTSE 250 - Fallers

Marks & Spencer Group (MKS) 122.00p -5.90%
Investec (INVP) 393.00p -5.87%
WH Smith (SMWH) 1,394.50p -5.71%
Mitchells & Butlers (MAB) 156.60p -5.03%
Balanced Commercial Property Trust Limited (BCPT) 95.50p -4.12%
XP Power Ltd. (DI) (XPP) 1,798.00p -3.64%
Virgin Money UK (VMUK) 147.65p -3.37%
Tullow Oil (TLW) 47.92p -2.76%
Chrysalis Investments Limited NPV (CHRY) 69.80p -2.51%
Ferrexpo (FXPO) 142.00p -2.34%