London open: Stocks fall amid concerns about China's Evergrande

London stocks fell in early trade on Thursday amid concerns about Chinese property group Evergrande, after it failed to complete a $2.6bn asset sale.

At 0920 BST, the FTSE 100 was down 0.3% at 7,199.21.

AJ Bell financial analyst Danni Hewson said: "The FTSE 100 slipped in early trading on Thursday as China’s Evergrande crisis reared its ugly head again. The heavily indebted property developer failed to complete a key asset sale to leave it teetering amid fears of wider contagion from a potential collapse of the business.

"This hit stocks with Chinese exposure, most notably the mining sector. China is the world’s biggest consumer of many metals and minerals.

"Rising Covid-19 cases in the UK were also affecting sentiment amid fears measures might need to be brought in over the winter to control the spread of the virus."

On the macro front, data released earlier by the Office for National Statistics showed UK public borrowing fell by almost half in the first six months of the financial year as it continued to recover from the impact of the Covid-19 pandemic.

Public sector borrowing fell to £108.1bn, down by £101.2bn in April-September 2020 but around three times its level before the pandemic.

Government borrowing fell to £21.8bn in September, a drop of around £7bn compared with September 2020, and lower than economists had forecast. It was also sharply lower than the £151.1bn the Office for Budget Responsibility had expected.

Britain's budget deficit soared last financial year to its highest since World War Two at 15% of GDP but is expected to drop to just over half that this year due to the end of emergency economic support and stronger tax revenues.

Last month Finance Minister Rishi Sunak announced a manifesto-breaking £12bn tax rise on workers and employers, starting next year, to fund health and social care.

Thursday's data showed public sector net debt totalled £2.22trn, or 95.5% of gross domestic product.

In equity markets, miners were under the cosh again as metals prices fell, with Anglo American, Rio, BHP and Glencore all lower.

Barclays was trading down a touch despite reporting a record £6.9bn of profit for the first nine months of 2021 as the securities business performed strongly and the retail bank released bad debt provisions made earlier in the pandemic.

Lancashire was the worst performer on the FTSE 250 as it said it expects net ultimate losses of between $165m and $185m from natural catastrophes including Hurricane Ida and European storms Bernd, Volker and Xero.

Meanwhile, greeting cards retailer Moonpig slumped after shareholders placed 30m shares, or a stake of around 8.8%, in the company.

On the upside, consumer goods giant Unilever rallied as it reported higher-than-expected third-quarter underlying sales growth, driven by higher prices and strong demand in the US, India, China and Turkey.

Relx gained after the company upgraded its full-year outlook for underlying growth rates in revenue and adjusted operating profit, as well as constant currency growth in adjusted earnings per share.

St James’s Place and Renishaw were also in the black after well-received updates.

Movers

FTSE 100 (UKX) 7,199.21 -0.33%
FTSE 250 (MCX) 22,958.25 -0.04%
techMARK (TASX) 4,572.91 0.08%

FTSE 100 - Risers

Unilever (ULVR) 3,878.00p 1.54%
Hikma Pharmaceuticals (HIK) 2,452.00p 1.32%
Legal & General Group (LGEN) 278.40p 1.31%
International Consolidated Airlines Group SA (CDI) (IAG) 159.48p 1.26%
Relx plc (REL) 2,242.00p 1.22%
St James's Place (STJ) 1,553.50p 1.04%
Bunzl (BNZL) 2,543.00p 1.03%
Halma (HLMA) 2,927.00p 1.00%
Reckitt Benckiser Group (RKT) 5,458.00p 0.59%
Sage Group (SGE) 715.80p 0.53%

FTSE 100 - Fallers

Anglo American (AAL) 2,738.00p -3.52%
Rio Tinto (RIO) 4,717.50p -3.44%
BHP Group (BHP) 1,949.60p -2.67%
Rentokil Initial (RTO) 589.60p -2.32%
Johnson Matthey (JMAT) 2,631.00p -2.23%
Glencore (GLEN) 369.75p -2.17%
Smiths Group (SMIN) 1,424.00p -1.93%
Lloyds Banking Group (LLOY) 48.21p -1.71%
BAE Systems (BA.) 586.40p -1.61%
Evraz (EVR) 630.80p -1.59%

FTSE 250 - Risers

Renishaw (RSW) 4,906.00p 5.73%
Shaftesbury (SHB) 629.00p 4.31%
Darktrace (DARK) 944.00p 3.57%
Capital & Counties Properties (CAPC) 164.00p 3.02%
Trustpilot Group (TRST) 338.20p 2.48%
Biffa (BIFF) 387.50p 2.11%
Wizz Air Holdings (WIZZ) 4,407.00p 1.99%
Cineworld Group (CINE) 63.60p 1.92%
Mediclinic International (MDC) 336.00p 1.63%
FirstGroup (FGP) 91.30p 1.56%

FTSE 250 - Fallers

Lancashire Holdings Limited (LRE) 522.50p -5.69%
Moonpig Group (MOON) 332.80p -4.53%
TUI AG Reg Shs (DI) (TUI) 221.50p -2.59%
Beazley (BEZ) 375.40p -2.54%
Petropavlovsk (POG) 24.40p -2.32%
Ferrexpo (FXPO) 311.00p -2.14%
Centamin (DI) (CEY) 97.00p -1.84%
Hiscox Limited (DI) (HSX) 819.60p -1.82%
Baillie Gifford US Growth Trust (USA) 329.00p -1.79%
Coats Group (COA) 67.20p -1.61%