The FTSE 100 slipped on Wednesday as miners weighed on the index amid poor Chinese economic data and ongoing concerns about interest rates and inflation, which weighed on sentiment.
US stocks had a better session overnight as traders bought into knocked-down AI stocks. But this didn’t carry over to the commodity-heavy FTSE 100 index, which was down 0.2% at the time of writing.
“Weak Chinese economic data has spooked investors in the mining sector, causing a sell-off amid fears that the Asian superpower might scale back commodity purchases,” says Dan Coatsworth, head of markets at AJ Bell.
“China’s GDP grew by 4.3% in the second quarter year-on-year, below the 4.5% to 5% target. The data reading took the market by surprise and might stir speculation that the Chinese government will dig deeper with economic stimulus measures.
“HSBC was caught up in the malaise as China is an important region for the group. As well as chasing opportunities in wealth management and corporate banking, HSBC has investments in Chinese companies including a strategic stake in Bank of Communications, one of the country’s largest state-owned banks.”
The main bright spot in the FTSE 100 on Tuesday was the housebuilders, who enjoyed a positive update from Barratt Redrow.
Mark Crouch, market analyst for eToro, said: “Barratt Redrow’s update offers investors a welcome change of tone after a bruising few months that saw the shares sink to their lowest level in more than a decade.”
“The UK housing market remains far from buoyant, with affordability pressures, higher build costs and subdued buyer confidence continuing to weigh on the sector. Yet beneath those headlines, the country’s largest housebuilder appears to be laying stronger foundations.”
Barratt Redrow rose 2% while Persimmon added 1%.
ICG was the FTSE 100’s top riser, gaining 3%, on the back of an upbeat trading statement. The group was upbeat about demand for one of its flagship funds.