London close: Chinese jitters dent sentiment
London stocks finished lower, weighed down by losses in miners' shares on the back of weak economic data out in China and amid continuing 'market chatter' regarding the potential risks linked to the country's market for corporate debt.
The FTSE 100 finished 0.35% or 25.74 points lower at 7,383.90, as the pound edged 0.14% higher against the euro to 1.1193 but was unchanged against the US dollar at 1.3337.
Industrial profit growth in China slowed from a 27.7% clip year-on-year for September to 25.1% in October
Against that backdrop, Zhang Qinghua, the head of fixed-income investing at E Fund Management, the manager of the best performing fund in that space in China, told Bloomberg News there was a high probability that credit spreads might widen in the Asian giant in 2018.
That sentiment was echoed by strategists at Citi, who recommended clients 'buy the dips' in global stocks, telling them the current bull market still had room to run after checking-off of the list of fifteen stock market indicators that make up their Bear Market Checklist.
However, they threw in a couple of caveats.
"The end of QE and high Chinese corporate debt give cause for concern. Neither is in our BMC," Citi said.
The week may have kicked off on a relatively muted note, but things were set to get a lot busier the following day, with the results of the Bank of England's stress tests.
CMC Markets analyst Michael Hewson said: "This year's focus is once again likely to be on RBS given its failure last year, but it should also be remembered that even if the other banks pass the tests they may well have to raise extra capital or submit revised capital plans which in turn could impact any future potential dividend payout.
"This is likely to be particularly true of Lloyds which passed last year’s test quite easily, however given the rise in domestic lending the bank may not have so much headroom this time around."
In corporate news, GlaxoSmithKline was boosted by an upgrade from UBS with budget carrier EasyJet another standout gainer after Exane BNP Paribas upped the stock to 'neutral'
Elsewhere, Aviva was a high riser following a Sunday Times report suggesting the company is planning a £1bn buyback.
AstraZeneca dipped after submitting a supplemental new drug application to Japan's drug regulator for its Tagrisso to be given as a first-line treatment of patients with certain types of non-small cell lung cancer.
Ocado racked up strong gains as Credit Suisse reiterated its 'outperform' rating on the stock and said weakness was overdone.
LondonMetric rose as it exchanged on the sale of an Odeon cinema in Derby and a retail asset in Guisborough for £18.6m.
On the downside, miners came under selling pressure as analysts at Liberum reiterated their 'sell' stance on the likes of BHP Billiton (target price: 800p), Rio Tinto (target price: 2750p), Glencore (target price: 300p) and Anglo American (target price: 800p), citing Chinese authorities drive to stimulate rental demand in the country which would "cannibalise" demand for the building of new homes.
Education publisher Pearson was under the cosh after agreeing to sell its Wall Street English business to a consortium of funds led by Baring Private Equity Asia and CITIC Capital for around $300m.
Ultra Electronics slipped despite saying has won a brace of contracts, one in the UK and one with Sweden's Saab, two weeks after the defence and security supplier issued a profit warning due to a slowdown in UK defence spending.
Micro Focus fell on the back of a downgrade to 'hold' at Deutsche Bank, while SIG and Marshalls were hit by initiations at 'underweight' from Barclays.
Market Movers
FTSE 100 (UKX) 7,383.90 -0.35%
FTSE 250 (MCX) 19,881.26 -0.32%
techMARK (TASX) 3,465.72 -0.03%
FTSE 100 - Risers
GlaxoSmithKline (GSK) 1,320.50p 1.77%
GKN (GKN) 311.10p 1.63%
Intertek Group (ITRK) 5,230.00p 1.55%
easyJet (EZJ) 1,385.00p 1.47%
Old Mutual (OML) 195.20p 1.35%
National Grid (NG.) 877.80p 1.29%
Persimmon (PSN) 2,589.00p 1.29%
International Consolidated Airlines Group SA (CDI) (IAG) 603.50p 1.26%
Mediclinic International (MDC) 526.50p 1.15%
WPP (WPP) 1,268.00p 0.96%
FTSE 100 - Fallers
Micro Focus International (MCRO) 2,557.00p -3.69%
Antofagasta (ANTO) 945.00p -3.42%
Anglo American (AAL) 1,430.00p -2.09%
Johnson Matthey (JMAT) 3,015.00p -2.08%
Fresnillo (FRES) 1,337.00p -2.05%
Pearson (PSON) 693.50p -2.05%
Hargreaves Lansdown (HL.) 1,597.00p -1.42%
BHP Billiton (BLT) 1,392.50p -1.28%
Merlin Entertainments (MERL) 357.50p -1.22%
Shire Plc (SHP) 3,677.24p -1.21%
FTSE 250 - Risers
Ocado Group (OCDO) 256.20p 7.33%
Sophos Group (SOPH) 646.00p 3.94%
Thomas Cook Group (TCG) 119.40p 2.40%
Woodford Patient Capital Trust (WPCT) 86.30p 2.14%
Grafton Group Units (GFTU) 746.00p 2.13%
Fidessa Group (FDSA) 2,471.00p 2.07%
Greencore Group (GNC) 191.90p 1.80%
Cineworld Group (CINE) 654.50p 1.79%
Marston's (MARS) 103.10p 1.68%
FDM Group (Holdings) (FDM) 954.00p 1.64%
FTSE 250 - Fallers
Acacia Mining (ACA) 182.80p -6.13%
Vedanta Resources (VED) 756.50p -4.60%
Tullow Oil (TLW) 168.60p -4.48%
Drax Group (DRX) 258.70p -4.29%
Provident Financial (PFG) 850.00p -4.28%
Kaz Minerals (KAZ) 801.50p -4.24%
Marshalls (MSLH) 440.80p -4.19%
PayPoint (PAY) 921.50p -3.56%
esure Group (ESUR) 246.30p -2.53%
TBC Bank Group (TBCG) 1,587.00p -2.52%