London midday: Stocks stay down as China protests rattle markets

London stocks were still in the red by midday on Monday as anti-lockdown protests in China rattled markets.

The FTSE 100 was down 0.4% at 7,458.92.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Unprecedented waves of protest in China have caused ripples of unease across financial markets, as worries mount about repercussions for the world’s second-largest economy. As demonstrations spread across the country from Beijing to Xinjiang and Shanghai, reflecting rising anger about the zero-Covid policy, a sustained recovery in demand across the vast country appears even further away.

"This has piled fresh downwards pressure on the oil price, with Brent Crude dropping to $81 a barrel, the lowest level since early January. Already pockets of violence have erupted as police forces push back at protestors, but there are expectations that a much more stringent security clampdown will be ordered.

"This is all dashing hopes of an easing of restrictions, given that Xi JinPing will not want to look like he’s backing down in the face of protests."

On home shores, the latest Distributive Trades Survey from the Confederation of British Industry showed that retail sales slumped in November as consumers tightened their belts amid the cost-of-living crisis.

The CBI’s reported sales balance declined to -19 from +18 in October, coming in well below consensus expectations of +2.

Martin Sartorius, principal economist at the CBI, said: "It’s not surprising that retailers are feeling the chill as the UK continues to be buffeted by economic headwinds. Sales volumes fell at a firm pace in the year to November, and retailers remain notably downbeat about their future business prospects. This pessimism is reflected in investment intentions worsening to the greatest extent since May 2020.

"Retailers and wholesalers contribute £352bn to the UK economy and support a fifth of the nation’s jobs - yet these survey results underline what a tough time it is for the sector. The Chancellor’s decision to back CBI calls for a freeze in businesses rates next April will provide some welcome relief, but retailers are also looking for longer-term measures from Government that can restore momentum to the UK economy. Businesses stand ready to work with Government to implement a serious plan for growth that can lift us all out of the current crisis."

In equity markets, oil giants Shell and BP gushed lower as oil prices slid.

Housebuilder Persimmon was under pressure after a downgrade to ‘sell’ at UBS. The sector more broadly was hit after property website Zoopla said people selling homes have been having to settle for below the asking price in recent weeks. Zoopla also predicted that house prices will decline by around 5% next year.

BT lost ground following a report the telecoms group is preparing to merge two of its struggling divisions serving corporate clients as it looks to cut costs. According to The Telegraph, the company is poised to combine its Global Services division with its Enterprise unit.

Property company Home Reit slid after saying late on Friday that it was delaying the release of its full-year results following a note by Viceroy Research, in which the Delaware-based firm questioned the valuation of its properties and its tenants’ ability to pay the rent.

Abrdn was knocked lower by a downgrade to ‘sell’ at Redburn, while Watches of Switzerland hit by a downgrade to ‘neutral’ at Goldman Sachs.

On the upside, Just Group rallied after an initiation at ‘buy’ at Jefferies.

Market Movers

FTSE 100 (UKX) 7,458.92 -0.37%
FTSE 250 (MCX) 19,345.36 -1.02%
techMARK (TASX) 4,412.83 -0.44%

FTSE 100 - Risers

Endeavour Mining (EDV) 1,703.00p 1.19%
Pearson (PSON) 988.00p 0.92%
Barclays (BARC) 160.32p 0.79%
Reckitt Benckiser Group (RKT) 5,944.00p 0.75%
Frasers Group (FRAS) 894.00p 0.68%
Centrica (CNA) 94.52p 0.62%
Compass Group (CPG) 1,850.50p 0.52%
Flutter Entertainment (CDI) (FLTR) 11,855.00p 0.51%
International Consolidated Airlines Group SA (CDI) (IAG) 134.62p 0.36%
Unilever (ULVR) 4,128.00p 0.35%

FTSE 100 - Fallers

Admiral Group (ADM) 2,064.00p -3.01%
Persimmon (PSN) 1,290.00p -2.90%
BT Group (BT.A) 124.40p -1.97%
Smith & Nephew (SN.) 1,083.50p -1.81%
SEGRO (SGRO) 813.20p -1.79%
Ocado Group (OCDO) 639.80p -1.54%
BP (BP.) 480.85p -1.54%
Scottish Mortgage Inv Trust (SMT) 758.40p -1.40%
RS Group (RS1) 931.00p -1.12%
St James's Place (STJ) 1,164.50p -1.06%

FTSE 250 - Risers

Just Group (JUST) 76.75p 5.43%
Vietnam Enterprise Investments (DI) (VEIL) 561.00p 2.94%
Trainline (TRN) 340.60p 2.22%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 419.00p 2.20%
FDM Group (Holdings) (FDM) 746.00p 1.50%
Hilton Food Group (HFG) 543.00p 1.50%
PureTech Health (PRTC) 275.00p 1.29%
Wizz Air Holdings (WIZZ) 2,232.00p 1.22%
Coats Group (COA) 67.30p 1.05%
TBC Bank Group (TBCG) 2,200.00p 0.92%

FTSE 250 - Fallers

Home Reit (HOME) 56.30p -5.70%
Caledonia Investments (CLDN) 3,820.00p -5.56%
Dr. Martens (DOCS) 196.70p -5.25%
Future (FUTR) 1,474.00p -4.66%
Syncona Limited NPV (SYNC) 176.20p -4.65%
Genuit Group (GEN) 312.00p -3.55%
Travis Perkins (TPK) 950.20p -3.47%
Wood Group (John) (WG.) 158.30p -3.33%
Fidelity China Special Situations (FCSS) 205.00p -3.30%
Energean (ENOG) 1,382.00p -3.29%