The FTSE 100 was trading almost flat in mid-afternoon trade in London as fresh concerns about US-Chinese relations hit sentiment.
Investors held back from launching an attack at the FTSE 100’s record highs above 8,000 after news broke of a Chinese cyber hacking campaign that targeted millions of US citizens. The index traded at 7,924 shortly after 2pm.
“The wait and see mood on the markets is continuing with recent exuberance fading, as investors look ahead to key consumer inflation data stateside, while they assess the implications of the latest ‘chip wars’ between the US and China,” said Susannah Streeter head of money and markets, Hargreaves Lansdown.
While the cyber attack, in isolation, has little direct economic consequence, the geopolitical implications will be a concern after China said it would not permit US chips in its government’s systems.
“Shares in a number of semi-conductor specialist Advanced Micro Devices and Intel slipped after Beijing signalled that foreign company chips would be phased out of government computers and services and replaced with home produced versions,” Streeter said.
“This latest chip skirmish isn’t not going to stop the AI juggernaut in its tracks, but it highlights one of the risks ahead for demand in the world’s second largest economy.”
Concerns about Chinese demand inevitably hit the FTSE 100 and the China-centric mining sector.
“Mining stocks were helping to clip the wings of the UK market amid growing tensions between major commodities consumer China and the West over hacking by Chinese spies,” said AJ Bell investment director Russ Mould.
Kingfisher was the FTSE 100’s top gainer as the DIY retailer continued yesterday’s rally on hopes the worst of the falling revenue is behind them.
Ocado was 2.5% higher after the company announced positive sales in its retail partnership with Marks & Spencer.
Autotrader fell 5% and was the FTSE 100’s top faller after Goldman Sachs cut its price target.
