The FTSE 100 sank again on Friday as US bond yields soared and a major Chinese real estate company filed for bankruptcy.
Anyone waiting for lower prices to start buying may soon take a genuine interest in London’s Bluechips.
The FTSE 100 was trading down 0.8% to 7,248 at the time of writing on Friday and is now down 4% year-to-date.
“Whether it’s the brewing crisis in the Chinese property market, the surge in US bond yields on fears rates will stay higher for longer, or the big drop in UK retail sales, things are starting to look a bit ugly out there,” said AJ Bell investment director Russ Mould.
“News China real estate giant Evergrande has filed for bankruptcy protection in the US would have prompted some alarm in isolation, but when you combine it with its peer Country Garden’s decision to suspend payments on some of its bonds and the words ‘dominos’ and ‘falling’ start to come to mind.
“China-exposed stocks on the FTSE 100 like Prudential and the miners are taking heat on Friday morning, helping to put the index on course for yet another down day. The FTSE is currently demonstrating all the pep and get up and go of a teenager at 8am on a school day.”
The selling wasn’t extreme, but it was broad, with 90 of the FTSE 100’s constituents trading negatively shortly after midday on Friday.
Miners such as Antofagasta – down 3% – were weaker but not catastrophically. The Chinese property crisis isn’t anything new, and the sector has been ins steady decline for a couple of weeks.
Airtel Africa was the biggest faller giving up 3%.
Defensive names, including British American Tobacco, National Grid and Imperial Brands, provided minor support, but the gains were nothing to write home about.