London open: Stocks mixed early on as China fears hit sentiment
The FTSE 100 was struggling for direction in early trading on Monday with mining stocks providing a drag on renewed concerns about demand as China's property crisis deepened.
London's benchmark index was more or less flat early on, down just 0.07% at 7,678, as decent gains by banking stocks were offset by falls from the heavyweight mining sector, along with Entain after a disappointing trading update/
Ongoing concerns about China's property sector were likely dampening optimism on the markets, after struggling Chinese developer China Evergrande cancelling a creditor meeting and scrapped a $35bn debt-restructuring plan, causing shares to drop 19% in Hong Kong. The Hang Seng Index fell 1.7%, but the Shanghai Composite declined just 0.6%.
However, the Nikkei gained 0.9%, outperforming other Asian markets on hopes of stimulus measures in Japan. The Bank of Japan on Friday decided to keep its ultra-loss monetary policy unchanged, saying it would "take additional easing measures without hesitation".
Meawhile, investors will likely be keeping a close eye on the price of oil again as it climbs further above the $90-a-barrel mark. Brent crude was up 0.7% at $92.63 early on.
"Oil prices are staging gains with hedge funds adding to their bullish bets fuelled by the expectation of ongoing weakness in supplies from Saudi Arabia and Russia," said Victoria Schloar, head of investment at Interactive Investor. "JPMorgan has warned of an energy super cycle that could push oil prices back above the psychological $100 a barrel resistance level," Scholar noted.
Monday is set to be a relatively quiet day in terms of economic data, with no major releases other than the IFO business confidence survey in Germany, which beat expectations for September. The expectations and current assessment sub-indices both improved more than expected, while the business climate sub-index was unchanged (analysts had expected a slight fall).
Miners drop, banks gain
Mining stocks dominated the fallers list on the FTSE 100, with Rio Tinto, Antofagasta, Fresnillo, Glencore and Anglo American among the worst performers, as newsflow from China hit share prices. "Anything bad in China typically has a negative knock-on effect to UK-listed diversified mining stocks," said AJ Bell investment director Russ Mould. "Investors are clearly worried that commodity demand will weaken if China’s economy continues to falter.”
Baking giants like Barclays, Standard Chartered and Natwest were putting in a decent performance early on.
Entain was a big mover, dropping over 5% after the Ladbrokes owner said third-quarter net gaming revenue would be down by by high single-digit percent – worse than previous guidance – driven by adverse sporting results during September, tighter gambling regulation and weaker growth in Australia and Italy.
British insurer Aviva edged lower on the news it had bought AIG's UK protection business for £460m. AIG Life UK provides a full suite of individual and group protection products, with 1.3 million individual protection customers and 1.4 million group protection members, Aviva said. Aviva's boss Amanda Blanc said the deal "brings significant strategic and financial benefits" to the company.
GSK rose on the approval of its Arexvy vaccine by Japan's Ministry of Health, Labour and Welfare. The vaccine, for the prevention of RSV disease in adults aged 60 and above, marks the first RSV vaccine for this age group in Japan.
Market Movers
FTSE 100 (UKX) 7,678.38 -0.07%
FTSE 250 (MCX) 18,541.69 -0.35%
techMARK (TASX) 4,369.75 0.10%
FTSE 100 - Risers
CRH (CDI) (CRH) 4,475.00p 3.09%
Barclays (BARC) 157.84p 1.62%
AstraZeneca (AZN) 11,224.00p 1.61%
IMI (IMI) 1,490.00p 1.36%
Standard Chartered (STAN) 759.20p 1.23%
M&G (MNG) 204.80p 0.99%
Smurfit Kappa Group (CDI) (SKG) 2,742.00p 0.81%
Pershing Square Holdings Ltd NPV (PSH) 3,024.00p 0.80%
NATWEST GROUP (NWG) 239.80p 0.76%
Frasers Group (FRAS) 823.00p 0.73%
FTSE 100 - Fallers
Entain (ENT) 1,001.50p -5.16%
Rio Tinto (RIO) 5,039.00p -2.78%
Antofagasta (ANTO) 1,387.50p -2.43%
Flutter Entertainment (CDI) (FLTR) 13,690.00p -2.35%
Ocado Group (OCDO) 677.80p -1.94%
Anglo American (AAL) 2,216.50p -1.40%
Fresnillo (FRES) 572.60p -1.38%
SEGRO (SGRO) 733.00p -1.19%
Land Securities Group (LAND) 600.60p -1.18%
Glencore (GLEN) 450.15p -1.08%
FTSE 250 - Risers
Close Brothers Group (CBG) 871.50p 2.65%
Pantheon International (PIN) 300.50p 2.56%
Investec (INVP) 495.90p 2.29%
Travis Perkins (TPK) 848.80p 1.77%
UK Commercial Property Reit Limited (UKCM) 55.70p 1.64%
Computacenter (CCC) 2,560.00p 1.27%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 272.50p 0.93%
Essentra (ESNT) 156.80p 0.90%
Fidelity European Trust (FEV) 342.00p 0.74%
The Renewables Infrastructure Group Limited (TRIG) 109.80p 0.73%
FTSE 250 - Fallers
Trainline (TRN) 259.20p -4.50%
Aston Martin Lagonda Global Holdings (AML) 268.40p -3.66%
Carnival (CCL) 1,029.50p -2.60%
TUI AG Reg Shs (DI) (TUI) 470.20p -2.49%
Ascential (ASCL) 197.10p -2.33%
Clarkson (CKN) 2,765.00p -2.30%
888 Holdings (DI) (888) 115.80p -2.11%
TI Fluid Systems (TIFS) 121.60p -2.09%
IWG (IWG) 152.20p -2.06%
Jupiter Fund Management (JUP) 95.20p -2.06%