Belfast Telegraph

London markets dive as China ratchets trade tensions with US

London’s top flight closed 183.21 points lower at 7,223.85 points at the end of trading on Monday.

Stock markets slumped as the decline in the value of Chinese yuan was viewed as a retaliation by the Chinese government against the US (Julien Behal/PA)
Stock markets slumped as the decline in the value of Chinese yuan was viewed as a retaliation by the Chinese government against the US (Julien Behal/PA)

The London markets all plunged lower, with all but one FTSE 100 firm in the red, as US-Chinese trade tensions ratcheted higher.

London’s top flight closed 183.21 points lower at 7,223.85 points at the end of trading on Monday.

Stock markets slumped as the decline in the value of Chinese yuan was viewed as a retaliation by the Chinese government against the US.

The trade war is heating up, and dealers are fearful the dispute will drag on for the foreseeable future David Madden, CMC Markets UK

The People’s Bank of China allowed the value of the currency to fall against the dollar, while Beijing authorities also instructed state-controlled firms not to purchase US agricultural goods.

David Madden, market analyst at CMC Markets UK, said: “The trade war is heating up, and dealers are fearful the dispute will drag on for the foreseeable future.

“China is a major buyer of metals and oil, and in turn mining and energy stocks have suffered today over fears that China’s demand for commodities will dip on account of the trade rift with the US.”

The European markets all saw sentiment significantly dented by the ongoing trade feud.

The German Dax decreased by 2.85%, and the French Cac fell by 2.19%.

The Dow Jones joined the other major markets in the red, after opening lower on Monday on the back of the trade rift.

Sterling was subdued after it recovered from an early slip lower thanks to better-than-expected services sector PMI data and weakness in the US.

Fiona Cincotta, senior market analyst, at City Index, said: “The UK service sector activity unexpectedly improved, marginally in July off-stetting concerns over the manufacturing and construction sectors.”

The pound was 0.03% up at 1.216 versus the US dollar, and down 0.73% at 1.086 against the euro.

In stocks, shares in HSBC slumped after the bank’s chief executive John Flint stepped down and it told investors that a change was needed “to meet the challenges” it faces.

HSBC also confirmed plans to cut 4,000 jobs globally – around 2% of its total workforce – after Mr Flint confirmed his departure following 18 months in the role.

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hares in HSBC slumped after the bank’s chief executive John Flint stepped down (Charlotte Ball/PA)

Shares in the banking firm closed down 19.3p at 626.8p.

EasyHotel saw shares soar after it recommended that investors accept an offer for the business from Luxembourg investment group ICAMAP, which already holds a 38.7% stake in the company.

However, the move is set to result in boardroom clash as the company’s founder Sir Stelios Haji-Ioannou – who still owns a 27% stake – urged shareholders to reject the deal.

Shares in EasyHotel closed up 24.5p to 95p at the end of trading.

Elsewhere, shares in Ocado and Marks and Spencer both slipped as they completed a £750 million deal for the high street retailer to buy a 50% stake in the online supermarket’s UK retail business.

Ocado saw shares slide 56p to 1,152.5p, while M&S shares fell by 10.3p to 190.65p on Monday.

The price of oil sank into the red again as trade war concerns weighed down on the value of the commodity.

The price of a barrel of Brent crude oil fell by 1.01% to 60.58 US dollars.

The only riser on the FTSE 100 was mining firm Fresnillo, which saw shares up 29p at 640p.

The biggest fallers on the FTSE 100 were Hargreaves Lansdown, down 139.5p at 1,903.5p, Prudential, down 88.5p at 1,512p, JD Sports, down 32.2p at 582p, and Taylor Wimpey, down 8.05p at 147.4p.

PA

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