The FTSE 100 started the week on the back foot after a raft of Chinese economic data provided further evidence the world’s second-largest economy’s recovery from the pandemic was facing major obstacles.
Chinese GDP missed analyst expectations and came in at 6.3% v forecasts of 7.1%. Retail sales data came in lower than consensus estimates.
- 2Q GDP GROWS 6.3% Y/Y; EST. 7.1%
- JUNE RETAIL SALES RISE 3.1% Y/Y; EST. 3.3%
- JUNE INDUSTRIAL OUTPUT RISES 4.4% Y/Y; EST. 2.5%
“The FTSE 100 has relinquished some of the gains it accumulated last week on weaker-than-expected Chinese economic data. China’s GDP rose 6.3%, which was higher than last quarter but some way below expectations,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
“The sheer scale of China’s economy means a perceived stalling in the post-pandemic recovery has ramifications for global demand and economies. There’s also little news to distract the market from looming UK inflation data later this week, with the UK poised to assess the latest reading and what this will mean for the interest rate trajectory.”
The FTSE 100 started the week down around 0.4% before buyers stepped in and helped close the gap from Friday’s close. As the session progressed, the FTSE 100 fluctuated in negative territory was down 17 points to 7,417 at 13.30pm in London.
Oil was weaker, with Brent trading down around 0.8% to $78.17 at the time of writing.
FTSE 100 movers
Weakness in commodities hit the FTSE 100’s natural resource constituents with miners suffering. Glencore fell 2.5%.
Ocado was down 2.8% ahead of half-year results due to be released tomorrow. The company’s retail business has suffered since the pandemic and the group as a whole is experiencing an identity crisis with some focused on average basket sizes of their food delivery service while speculation swirls Amazon are eyeing their technology business and are preparing a bid. Neither Amazon or Ocado have commented on takeover talks.
Johnson Matthey was the FTSE 100 top riser after Deutsche Bank raised their rating to buy with a 2,500p price target.
There were few other gainers of note.
