The FTSE 100 slipped again on Monday after poor Chinese data hit London’s many China-leaning shares, including financials and miners.
The weight of declines from stocks such as Rio Tinto, Burberry, Antofagasta, and Prudential more than offset any positivity from a 20% jump in Rightmove after the property portal received a bid from Rupert Murdoch’s
“There’s no September spark for the FTSE 100, with the index trading flat and losing more ground early in the session,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“After a disappointingly lower close on Friday, the footsie remains elusively below its record highs, with mining stocks sinking lower amid China’s ongoing economic troubles.”
China released mixed manufacturing data over the weekend, which pointed to stuttering economic growth at a time when investors are growing increasingly nervous about the country failing to hit its 5% growth target.
Traditionally, the country has been seen as a beacon of hope for global growth, but this simply hasn’t been the case since the pandemic.
More worrying for investors, Chinese authorities seem to be happy to let the troubles with the property market and slowing manufacturing sector run their course.
Market participants have long been accustomed to intervention in the form of stimulus measures. However, the lack of interest by China in supporting its economy is becoming a major headwind for many sectors reliant on the country.
“The world’s second largest economy may be trying to wean itself off its reliance on export demand by stoking domestic consumption,” explained AJ Bell investment director, Russ Mould.
“But this is proving a tricky process and exports were down for the first time in eight months amid weak consumer demand outside of China. This chimes with recent poor numbers from Temu-owner PDD.”
Rightmove
Another high-quality London-listed company could be on the verge of being taken private by an overseas player who clearly sees more value in the company than the UK’s public markets are prepared to attribute it.
Rightmove shares soared on Monday following news that REA Group was considering a bid to acquire the company and add it to its portfolio of Australian property portals.
“The standout name on the FTSE 100’s risers list was Rightmove which moved around 20% higher after Australian group REA confirmed it was considering a takeover of the property portal,” Russ Mould said.
“This news breathed some life into the share price after a static period but don’t expect the company to be snapped up without a fight. Shareholders will be pushing for a generous deal and other potential bidders may throw their hat into the ring with rival proposals.”