London midday: Stocks down but off lows after Burberry warning, China data

London stocks were down but off earlier lows by midday on Monday following disappointing Chinese GDP figures and a profit warning from Burberry.

The FTSE 100 was down 0.3% at 8,230.30, with investors also mulling an attempt on US presidential candidate Donald Trump’s life over the weekend, which has raised expectations he may win the election.

Dan Coatsworth, investment analyst at AJ Bell, said: "Markets were surprisingly calm given the assassination attempt on US presidential candidate Donald Trump.

"While equities saw a small pullback in parts of the world, there was no panic on the markets as a result of the weekend of violence.

"The polls already implied Trump had a fighting chance of winning the presidential election. The markets are now looking for clues that he has won additional support from the American public.

"One such signal has been sounded in the cryptocurrency market where bitcoin has jumped 5% to $62,831 since the incident. Trump is seen to be pro-crypto and the theory that he is now in a stronger position in the race to the White House has fired up traders looking for assets to benefit if he gets back into power.

"Quite a few of the main European and Asian equity indices pulled back slightly, but futures prices imply a positive opening for US equities today."

On the macro front, data released earlier by China’s National Bureau of Statistics showed second-quarter growth slowed to 4.7% year-on-year from 5.3% in the first quarter, missing expectations of 5.1% growth.

ING said "weak consumption and property continued to be a drag on growth".

On home shores, data from Rightmove showed that house prices dipped in July as the general election, international sporting events and the start of the summer holidays unsettled the market.

According to Rightmove’s latest house price index, house prices eased 0.4% in July month-on-month, compared to June, when growth was flat. On an annual basis, prices ticked up 0.4%.

The national average asking price now stands at £373,493.

Rightmove said the drop was bigger than usual for this time of year, with new sellers hit with a series of distractions, including Euro 2024 and weeks of campaigning ahead of the 4 July general election.

The 20-year average for July is a 0.2% decline.

However, Rightmove added that growing expectations for an imminent cut in interest rates, along with a more stable political outlook following Labour’s historic win, boded well for the autumn market.

The number of sales being agreed was also an "encouraging" 15% above the same period a year ago, it noted.

Tim Bannister, director of property science at Rightmove, said: "Three major uncertainties hanging over the property market at the start of the year were when the first interest rate cut would be, and the timing and result of the general election.

"We’ve now got the political certainty of a new government with a large majority, which we expect will help home-mover confidence. It’s very early days, but the new chancellor’s immediately announcements on housebuilding targets and planning reform are positive signs."

The cost of borrowing currently remains at a 16-year high of 5.25%. But the market widely expects the first cut in either August or September.

In equity markets, luxury goods maker Burberry tumbled as it ousted its chief executive, suspended dividend payments and issued a profits warning after a slump in first-quarter revenues due to weak demand in all markets.

Chris Beauchamp, chief market analyst at online trading platform IG, said: "This is a kitchen sink exercise par excellence, and underscores the enormity of the challenge facing Burberry in a world where Chinese sales can no longer be taken for granted.

"However, as one of the more heavily-shorted FTSE shares, and trading at 11 times earnings, perhaps today might see at least a short-term pop for the share price, on the basis that most of the bad news is now firmly in the price."

Ocado tanked after a downgrade to ‘underperform’ from ‘outperform’ at Bernstein, which slashed its price target to 250p from 1,000p, "having been one of the last bulls standing".

It said the jam tomorrow story is now "less jam, more tomorrow". Bernstein noted that customer fulfilment centres have been paused or pushed back, refinancing is looming, "Kroger is stuck" and the company will need more cash.

Ocado is also due to release half-year results on Tuesday.

Oil giant BP gushed lower after a downgrade to ‘equalweight’ at Morgan Stanley.

Elsewhere, Robert Walters slumped after saying it saw a continued decline in net fee income in the second quarter as it continues to battle with "muted" client and candidate confidence, saying that challenging market conditions are lasting longer than initially expected.

Market Movers

FTSE 100 (UKX) 8,230.30 -0.27%
FTSE 250 (MCX) 21,176.00 -0.13%
techMARK (TASX) 4,843.76 -0.09%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 3,746.00p 2.35%
Hikma Pharmaceuticals (HIK) 1,874.00p 2.01%
BAE Systems (BA.) 1,287.50p 1.54%
InterContinental Hotels Group (IHG) 8,412.00p 1.15%
Ashtead Group (AHT) 5,270.00p 0.92%
3i Group (III) 3,037.00p 0.70%
Vistry Group (VTY) 1,345.00p 0.67%
Unilever (ULVR) 4,460.00p 0.59%
Halma (HLMA) 2,686.00p 0.56%
Pearson (PSON) 1,019.00p 0.54%

FTSE 100 - Fallers

Burberry Group (BRBY) 741.20p -16.40%
Antofagasta (ANTO) 2,158.00p -3.01%
Croda International (CRDA) 3,980.00p -2.31%
SSE (SSE) 1,833.00p -1.93%
Prudential (PRU) 718.20p -1.89%
JD Sports Fashion (JD.) 113.75p -1.73%
Anglo American (AAL) 2,355.50p -1.69%
Airtel Africa (AAF) 116.60p -1.60%
Marks & Spencer Group (MKS) 305.10p -1.45%
B&M European Value Retail S.A. (DI) (BME) 442.00p -1.41%

FTSE 250 - Risers

Just Group (JUST) 111.60p 3.33%
Kier Group (KIE) 156.40p 3.30%
Workspace Group (WKP) 638.00p 2.08%
Future (FUTR) 1,104.00p 2.03%
Trustpilot Group (TRST) 236.50p 1.72%
Jupiter Fund Management (JUP) 89.30p 1.59%
XPS Pensions Group (XPS) 325.00p 1.56%
Bank of Georgia Group (BGEO) 4,450.00p 1.37%
Tyman (TYMN) 376.00p 1.35%
Lancashire Holdings Limited (LRE) 618.00p 1.31%

FTSE 250 - Fallers

Ocado Group (OCDO) 338.50p -10.92%
W.A.G Payment Solutions (WPS) 65.60p -3.53%
Indivior (INDV) 787.50p -3.31%
Aston Martin Lagonda Global Holdings (AML) 157.80p -3.19%
Dr. Martens (DOCS) 74.10p -3.14%
Watches of Switzerland Group (WOSG) 395.00p -2.85%
Ashmore Group (ASHM) 175.50p -2.50%
Quilter (QLT) 119.10p -2.14%
Victrex plc (VCT) 1,122.00p -2.09%
Schroder Asia Pacific Fund (SDP) 540.00p -1.82%