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London open: Stocks decline on weak Chinese trade data
UK stocks declined on Tuesday as poor Chinese trade data added to worries about the health of the world’s second largest economy.
Chinese exports plunged 25.4% in February from a year earlier, marking the biggest slump in more than five years and compared to analysts’ expectations for a 14.5% drop.
Imports decreased 13.8% year-on-year, more than forecasts for a 12% slide.
China’s trade surplus narrowed in February to $32.59bn from $63.29bn in January, below estimates for a $51.25bn surplus.
“Chinese trade data showed February exports plunged 25.4% which has spooked markets already concerned about slowing global growth rather than adding to hopes of more stimulus from Beijing (too much work to do for policy makers?),” said Mike van Dulken and Augustin Eden at Accendo Markets.
“However, the Lunar New Year holiday may have interfered with the data.”
Mining stocks were in the red following the data, including Anglo American, BHP Billiton and Rio Tinto.
An increase in oil prices on Monday failed to lift the mood although the gains reversed slightly in Tuesday morning trade. Brent crude fell 0.59% $40.60 per barrel and West Texas Intermediate dipped 0.61% to $37.67 per barrel at 0903 GMT.
Meanwhile, the market will be watching Bank of England Governor Mark Carney’s testimony on Brexit at the parliament committee at 0915 GMT.
The Eurozone will see the release of gross domestic product data at 1000 GMT, which comes ahead of the European Central Bank’s policy announcement on Thursday.
In company news, Close Brothers was under the cosh after the specialist financial services company warned that its UK trading services business Winterflood “remains sensitive to market conditions”.
Tesco’s shares gained as data from Kantar Worldpanel showed the supermarket halved its sales decline in the last three months.
Burberry rallied on speculation that the UK’s biggest luxury goods producer is setting up defences against a potential takeover offer.
Worldpay’s shares edged lower as the group did not recommend a dividend in its full year results despite swinging to a profit in 2015.
