London open: Stocks fall as China data sparks concerns
By Michele Maatouk
Date: Monday 16 May 2022
(Sharecast News) - London stocks edged lower in early trade on Monday as disappointing Chinese data added to concerns about a global slowdown.
At 0830 BST, the FTSE 100 was down 0.4% at 7,390.31.
Victoria Scholar, head of investment at Interactive Investor, said: "China's economic data pointed to a notable slowdown in April. Retail sales fell by 11% year-on-year, missing analysts' estimates and marking the biggest drop since March 2020. Industrial production also disappointed, falling for the first time in over two years, slumping by 2.9% versus expectations for 0.4% growth and down from a 5% gain in March.
"The urban unemployment rate worsened to 6.1% in April from 5.8% in March, marking the highest reading since February 2020 at the height of the pandemic. China's National Bureau of Statistics blamed the 'increasingly grim and complex international environment and greater shock of the pandemic at home'.
"China's draconian approach to its latest covid outbreak has really started to weigh heavily on its economy, a critical engine of growth around the world as seen by today's figures. It is raising concerns that the world's largest economy could shrink in the second quarter, potentially paving the way for a recession by the end of Q3 which would have a notable impact on the outlook for global growth."
In equity markets, Aviva slumped due to a share consolidation and after a downgrade to 'neutral' by Goldman Sachs.
Rolls-Royce was also trading down after JPMorgan reiterated its 'underweight' rating on the shares.
Credit-checking firm Experian was weaker after it agreed to buy a 51% stake in Brazilian fintech group MOVA as part of a BRL 40.0m (£6.45m) cash deal.
High Street baker Greggs was on the back foot as it posted a 15.8% rise in like-for-like sales in the 10 weeks to May 14 at its company-managed stores, but said it expected figures to normalise against comparisons with more "robust" trading periods last year.
Specialist technical products maker Diploma was in the red as it said it expected annual operating margins to be at the top end of guidance after posting a rise in interim profits, but as revenues fell short of expectations.
On the upside, Vodafone rallied after Emirates Telecommunications Group took a 9.9% stake in the company for around $4.4bn.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN