Investing
London stocks slid as China growth concerns dent global risk appetite
By Bansari Mayur Kamdar
(Reuters) – UK shares tracked Asian and European markets lower on Monday, as tightening lockdowns in China added to investors’ concerns about a recession amid the Bank of England’s dour economic outlook last week.
The commodity-heavy FTSE 100 index fell 0.7% in early trade, with miners leading losses as metal prices dropped on demand concerns. [MET/L]
Industrial metal miners including Rio Tinto, Glencore and Anglo American fell about 2.5% each.
“The biggest concern that markets have at the moment about UK is that we’re likely to see fewer rate hikes over the course of the next 12-18 months and much slower growth, but I don’t think we’re going to be unique in that,” said Michael Hewson, chief market analyst at CMC Markets, UK.
The FTSE 100 index has outperformed its European peers so far this year but a weakness in mining stocks in the last few weeks is starting to weigh on the commodity-heavy index.
(Graphic: https://fingfx.thomsonreuters.com/gfx/mkt/dwvkrymwjpm/Miners%20FTSE.PNG)
Investors were already rattled after the British central bank sent a stark warning on Thursday that Britain risks a double-whammy of a recession and inflation above 10%.
The pound declined 0.4%, limiting some losses on the export-heavy FTSE 100, compared to the domestically focussed mid-cap index falling 1.7%.
Capital & Counties Properties and Shaftesbury Plc slid 4.3% and 2.9%, respectively, after the real estate firms said they were in advanced talks on a merger that would bring such London tourist destinations as Covent Garden and Soho under one umbrella.
Ideagen Plc jumped 46.1% on agreeing to a takeover by private equity firm Hg Pooled Management in an all-cash deal valuing the British software firm at 1.09 billion pounds ($1.34 billion).
(Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Uttaresh.V and Rashmi Aich)
Frequently Asked Questions about London stocks slid as China growth concerns dent global risk appetite
1What is the FTSE 100?
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, measured by market capitalization.
2What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually.
3What are miners in the stock market?
Miners refer to companies involved in the extraction of minerals and metals, such as gold, silver, and copper, which are traded on stock exchanges.
4What is a recession?
A recession is a significant decline in economic activity across the economy, lasting longer than a few months, typically visible in GDP, income, employment, and production.
5What is the Bank of England?
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, setting monetary policy, and maintaining financial stability.
