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London open: Stocks slip on China and oil price worries
UK stocks fell on Thursday as concerns over China’s troubles escalated and as oil prices collapsed.
Chinese trading in mainland markets was halted for the day after shares fell more than 7% for the second time this week.
The country’s “circuit-breaker” rule kicked in the first 30 minutes of trading, making it the shortest ever trading day.
“Combine China’s current chaos with the backbone-less (and China-exacerbated) performance from Brent Crude (which, after falling 6% yesterday, has collapsed by a further 4.5% this morning to hit a fresh 11 year low) and the global indices have been left in the midst of what is arguably their most calamitous week since the storied trading of last August,” said Connor Campbell, financial analyst at Spreadex.
At 0901 GMT, Brent crude fell 3.7% to $33.01 per barrel and West Texas Intermediate dropped 4.2% to $32.58 per barrel.
On the macro-economic data front, German factory orders rose 2.1% in November compared to a year ago, beating expectations for a 1.1% increase.
German retail gained 2.3% year-on-year in November, trailing estimates for a 3.7% jump.
UK house prices rose more than forecast in December, rising 1.7% from a month ago, compared to estimates of 0.5%.
Still to come, a batch of Eurozone reports are due including on retail sales, consumer confidence and unemployment. In afternoon trade, US initial jobless claims are due.
In company news, Marks & Spencer gained after reporting a mixed trading statement and saying chief executive Mark Bolland will retire this year and hand the baton to well-regarded merchandise chief Steve Rowe.
Mining stocks were under pressure on China woes, including Anglo American, BHP Billiton, Glencore and Rio Tinto.
Oil producers were also under the cosh on the price slump, including Royal Dutch Shell, BG Group, Tullow Oil and Nostrum Oil & Gas.
HSBC rebounded after receiving a downgrade from JP Morgan to ‘underweight’ from ‘neutral’.
