Markets: Chinese whispers cool the Footsie

By DOMINIC JEFF
Published on 10/07/2012 00:00

WORRIES that the Chinese economy is slowing combined with old concerns about Spain’s ability to service its debt to drag London’s globally exposed stocks lower yesterday.

Angus Campbell, head of market analysis at Capital Spreads, said: “The FTSE 100 is very susceptible to moves on the back of important data from around the world and a surprise drop in inflation from China caused investors to worry that the world’s second biggest economy is heading for a hard landing.”

The Footsie fell 35.3 points to 5,627.3 after Spanish ten-year bond yields once again moved above 7 per cent, widely seen as an unsustainable level.

Anglo American dragged miners down as broker RBC Capital Markets said lower profits guidance from two of its listed subsidiaries pointed to a trend across the sector due to lower metal and mineral prices. Anglo was down by 61.5p at 2,042.5p, with Xstrata 18.4p lower at 815.6p.

Outside the top flight, JJB Sports slumped 25 per cent – 2.5p to 7.4p - after wet weather and poor sales of replica shirts in the run-up to Euro 2012 left like-for-like sales 8 per cent lower.

Edinburgh-based oil and gas firm Melrose Resources gained 1.6 per cent to 124p after a detailed update on its operations in which it increased the level of “proven plus probable” reserves at one of its Egyptian gas field. But peer Bowleven lost its recent gains as takeover rumours faded once again in the absence of any confirmation. It was 12 per cent lower at 62.5p.

Aim-quoted financial adviser Lighthouse Group angered shareholders when it published plans to de-list, citing uncertainty over the impact of upcoming regulatory reforms. Its shares plummeted by 36 per cent to 3.1p.

NEW YORK: Wall Street closed lower last night ahead of US corporate earnings reports and amid more signs of instability in Europe.

The Dow Jones industrial average ended down 36.18 points, or 0.28 per cent, at 12,736.29 while the broader Standard & Poor’s 500 Index was down 2.22 points, or 0.16 per cent, at 1,352.46 by the close. The Nasdaq Composite Index was down 5.56 points, or 0.19 per cent, to close at 2,931.77.