FTSE 100 upside down as Chinese fears grow
Heavyweight miners were at the forefront of another market sell off today after investors had more reason to worry about the strength of the Chinese economy.
Anglo American fell 8% on Friday and 6% today, the continued decline in iron ore prices since the May peak accompanied by further evidence of a slowdown in the Chinese real estate sector after shares in the Evergrande developer in Hong Kong.
The risk-free session left the FTSE 100 index lower by more than 1%, down 94.86 points to 6,868.78, after falling below 7,000 for the first time since July on Friday.
The impact of rising prices added to market nervousness, especially with policymakers at the Bank of England and US Federal Reserve meeting later this week.
Hargreaves Lansdown analyst Susannah Streeter said: “With the recovery stuttering, as prices rise, there are fears that stagflation lethargy is emerging on an unstable economic base.”
Along with declines of 4% and more for miners, including Rio Tinto and Glencore, Asian-focused stocks dominated the slaughter board in London. Standard Chartered fell from 16.9p to 425.1p and luxury goods company Burberry was 55.5p cheaper at 1,742.5p.
The fall in market sentiment was particularly bad for Prudential after unveiling the latest step in its restructuring with a plan to raise around Â£ 2 billion from Hong Kong investors as it focuses on growth at long term in Asia and Africa.
Stocks fell more than 6% or 95.5p to 1350p.
British Airways owner IAG went the other way after chief executive Luis Gallego told the Sunday Times that his company was not expected to follow the lead of the 1 rights issue. , Â£ 2 billion from easyJet. Amid investor relief, stocks rose 3.7 pence to 153.22 pence.
AstraZeneca was also 2% higher after reporting positive results for possible treatment for breast cancer.
The UK-focused FTSE 250 index was not immune to massive market sales, falling 302.21 points to 23,356.73 and led lower by operator Wagamama Restaurant Group after stocks slipped 7% or 8.2 points to 106.8 points.