London open: Stocks fall after disappointing China data, Burberry profit warning

London stocks fell in early trade on Monday following disappointing Chinese GDP figures and a profit warning from Burberry.

At 0825 BST, the FTSE 100 was down 0.7% at 8,191.87, 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.

Data released earlier by China’s National Bureau of Statistics showed that 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".

It added that more policy support will be needed in order to achieve this year's 5% growth target.

House prices were 4.5% lower than last year in June, worsening from the 3.9% drop in May, registering the 12th consecutive decline and the steepest decrease since June 2015.

Annual retail sales growth slowed to 2.0% from 3.7%, missing the 3.3% estimate, reflecting continued weak domestic demand.

Meanwhile, industrial production growth eased to 5.3% year-on-year from 5.6%, while fixed asset investment growth slipped to 3.9% from 4.0%.

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."

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’ at Bernstein and ahead of half-year results on Tuesday.

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

Market Movers

FTSE 100 (UKX) 8,191.87 -0.74%
FTSE 250 (MCX) 21,105.45 -0.46%
techMARK (TASX) 4,831.72 -0.33%

FTSE 100 - Risers

Smurfit Westrock (DI) (SWR) 3,750.00p 2.46%
Entain (ENT) 681.00p 0.68%
BAE Systems (BA.) 1,272.00p 0.32%
Darktrace (DARK) 576.40p 0.14%
Smith (DS) (SMDS) 421.20p 0.10%
InterContinental Hotels Group (IHG) 8,320.00p 0.05%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Experian (EXPN) 3,706.00p -0.05%
CRH (CDI) (CRH) 6,148.00p -0.10%
Admiral Group (ADM) 2,605.00p -0.15%

FTSE 100 - Fallers

Burberry Group (BRBY) 798.00p -9.99%
Antofagasta (ANTO) 2,161.00p -2.88%
NATWEST GROUP (NWG) 318.00p -1.73%
Croda International (CRDA) 4,010.00p -1.57%
Anglo American (AAL) 2,359.00p -1.54%
Marks & Spencer Group (MKS) 305.00p -1.49%
JD Sports Fashion (JD.) 114.10p -1.43%
Lloyds Banking Group (LLOY) 58.26p -1.42%
WPP (WPP) 724.00p -1.42%
Prudential (PRU) 722.20p -1.34%

FTSE 250 - Risers

Zigup (ZIG) 438.00p 3.30%
PZ Cussons (PZC) 106.60p 2.30%
OSB Group (OSB) 488.60p 2.17%
Spire Healthcare Group (SPI) 245.00p 2.08%
RHI Magnesita N.V. (DI) (RHIM) 3,665.00p 1.81%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 140.00p 1.60%
Bakkavor Group (BAKK) 158.00p 1.28%
Diversified Energy Company (DEC) 1,194.00p 1.10%
JTC (JTC) 1,030.00p 0.98%
North Atlantic Smaller Companies Inv Trust (NAS) 4,130.00p 0.73%

FTSE 250 - Fallers

Ocado Group (OCDO) 357.80p -5.84%
Wetherspoon (J.D.) (JDW) 733.50p -4.99%
Bridgepoint Group (Reg S) (BPT) 241.40p -4.74%
SThree (STEM) 420.50p -3.89%
Morgan Advanced Materials (MGAM) 322.50p -2.57%
Rathbones Group (RAT) 1,746.00p -2.57%
AJ Bell (AJB) 386.50p -2.03%
Supermarket Income Reit (SUPR) 73.00p -2.01%
Premier Foods (PFD) 168.80p -1.97%
Target Healthcare Reit Ltd (THRL) 81.00p -1.82%