London returns to red on China nerves
Wed: London stocks plunged back into the red as concerns over China’s stuttering economy showed no signs of letting up.
The FTSE 100 was just holding on to the 6,000 level at the close after leaping yesterday as the People’s Bank of China cut interest rates for the fifth time since November.
However, it barely seemed to contain the panic as markets returned to selling mode.
“Contagion from China to credit markets is deep and widespread, in our opinion. Despite the PBoC’s latest measures, structural issues remain and things may get worse,” Alberto Gallo at RBS said in a research note emailed to clients.
On the company front, WPP dropped despite reporting a 44.5% jump in first half pre-tax profit as revenues grew 6.8%.
Carillion slumped as it revealed flat pre-tax profits for the first half.
Miners continued to shoulder the weight of China woes with Anglo American, Antofagasta and Fresnillo in negative territory. Stocks in the sector were affected by lower gold, silver and copper prices.
Betfair advanced after posting a 15% increase in revenue for the first quarter and announcing that it has agreed in principle to a possible merger with Paddy Power.
In early trade the FTSE100 was down 1.45% at 5,993.23.