Belfast Telegraph

Weak China economic data sends FTSE into the red

The London market sank into the red as weak economic data from China sparked fresh fears of a global economic slowdown.

The FTSE 100 Index hit a three-week low, down 56.3 points to 6185.6 points, as negativity spread across European markets after Chinese manufacturing data for April showed activity shrank for the 14th month in a row.

The economic update from the Far East took its toll on commodity stocks, with mining giant Anglo American leading the market lower, plummeting nearly 13% or 97.7p to 665.7p.

Miners Antofagasta and Rio Tinto were also among the biggest fallers, dropping 35.5p to 447.7p and 146p to 2154.5p respectively, amid concerns that China's consumption of commodities will fall if its economic growth starts to slacken.

Brent crude also heaped pressure onto commodities as it slipped 1.6% to 45.1 US dollars a barrel, with Royal Dutch Shell down 24.5p to 1761.5p ahead of its first quarter results tomorrow.

Across Europe, Germany's Dax was nearly 2% lower and the Cac 40 in France slipped 1.6%, as they felt the force of the manufacturing update from China, which came in below market expectations at 49.4 last month, according to the Caixin/Markit Manufacturing Purchasing Managers' index (PMI).

Banking stocks also came under fire after HSBC posted a sharp drop in profits for the first three months of the year after it was hit by "extreme levels of volatility" in financial markets in January and February.

The banking giant was more than 1% down after reporting an 18% fall in underlying pre-tax profits to 5.43 billion US dollars (£3.7 billion) for the first quarter.

On a bottom-line basis, profits fell 14% to 6.11 billion US dollars (£4.2 billion).

Standard Chartered was down 31.8p to 520.3p, while Barclays slipped 6.8p to 164.8p and Royal Bank of Scotland dropped 7.5p to 222.5p.

On the currency markets, the pound was down 0.8% against the dollar at 1.453, as Britain's manufacturing sector saw activity contract for the first time in more than three years in the latest sign that the EU referendum is hurting the UK economy, according to a survey.

The closely watched Markit/CIPS UK Manufacturing purchasing managers' index showed a reading of 49.2 in April - the first time the index has fallen below the critical 50 mark since March 2013. A reading below 50 signals falling output.

Sterling was also down 0.6% against the euro at 1.264.

In stocks, HSBC fell 7.5p to 445.1p as the bank said it put in a "resilient" performance in difficult market conditions, with the entire investment banking sector suffering after stock markets tumbled at the start of 2016 amid an oil price rout.

Aberdeen Asset Management was more than 7% lower after the fund group saw interim profits nearly halve as it continued to suffer amid an emerging markets rout.

The firm said pre-tax profits tumbled to £98.8 million in the six months to March 31, down from £185.4 million a year earlier after investors continued to head for the exit.

Shares were down 22p to 276.7p.

RSA Insurance Group was the best performer on the London market, as it stepped up nearly 3% following an upgrade from Barclays to overweight from equal-weight.

Away from the top tier, o nline takeaway firm Just Eat soared nearly 4% or 18.8pp to 402.3p as upped its full-year profit guidance after increasing the amount it charges restaurants in the UK.

The biggest risers in the FTSE 100 Index were RSA Insurance up 12.9p to 472p, Carnival up 86p to 3483p, Admiral Group up 46p to 1903p, Sage Group up 11.5p to 603.5p.

The biggest fallers were Anglo American down 97.7p to 665.7p, Glencore down 13.1p to 149.8p, Antofagasta down 35.5p to 447.7p, Rio Tinto down 146p to 2154.5p.