London midday: FTSE stays down as China woes weigh; GSK slumps

(Sharecast News) - London stocks were still a little weaker by midday on Monday after Chinese officials poured cold water on hopes the country will relax its Covid restrictions. The FTSE 100 was down 0.2% at 7,320.67.

Investors were digesting the latest Chinese trade data, which showed that exports came in worse than expected in October, dragged down by a drop in exports to the EU and softening global demand.

The trade balance rose to $85.2bn from $84.7bn in September, versus consensus expectations of $96bn.

Exports rose 0.3% year-over-year in October, down from 5.7% growth a month earlier and well below consensus expectations of 4.5% growth. Meanwhile, imports rose 0.7% following a 0.3% jump in September. Economists had been expecting no growth.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Chinese authorities have quashed rumours of a faster end to the country's zero-covid policy, bringing the rally at the end of the week to an abrupt end with the Shanghai composite dipping in and out of negative territory.

"China's exports to the US and Europe have also dipped as it's become clear how supply chain problems, combined with weakening demand among consumers is clearly taking effect. China's National Health Commission warned the Covid situation would become more severe and complex as the winter flu season approaches. This determination to press on with onerous restrictions as outbreaks occur has helped bolster the dollar again, against a basket of currencies, as the extra layer of worry sends investors in search of safer havens.

"Hopes that an easing off of the strict strategy would help boost China's flagging prospects and lead to more certainty for manufacturing output and retail sales have evaporated. This is set to hit commodity companies in particular and those companies reliant on the confidence of Chinese consumers."

On home shores, data from mortgage lender Halifax showed house prices fell in October at the fastest monthly rate since February 2021 amid rising mortgages rates and a downbeat outlook.

Prices declined by 0.4% on the month following a 0.1% dip in September. On the year, meanwhile, house prices were down 8.3% in October following a 9.8% fall a month earlier.

A typical UK property now costs £292,598 - a five-month low - down from £293,664 in September.

Kim Kinnaird, director of Halifax Mortgages, said: "Understandably we have also seen consumer caution grow, as industry data shows mortgage approvals and demand for borrowing declining. The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels. With tax rises and spending cuts expected in the Autumn Statement, economic headwinds point to a much slower period for house prices."

In equity markets, GSK slumped after saying that its blood cancer drug, Blenrep, failed to meet the main goal of a late-stage study.

Asia-focused Prudential and HSBC were both in the red as hopes of a Chinese reopening faded.

On the upside, IWG rocketed following a Sky News report that CVC Capital Partners had made a £1.5bn approach for its Instant Group arm.

Online supermarket Ocado rose, having surged last week after it announced a deal with South Korea's Lotte Shopping.

Mike Ashley's Frasers Group rallied as it launched a share buyback programme of up to £70m and following a report the company is among bidders for Made.com.

Paddy Power owner Flutter Entertainment advanced after a New York arbitrator sided with the company in its spat with Fox over FanDuel. Entain also gained.

Market Movers

FTSE 100 (UKX) 7,320.67 -0.19% FTSE 250 (MCX) 18,583.85 1.32% techMARK (TASX) 4,293.85 0.24%

FTSE 100 - Risers

Ocado Group (OCDO) 686.40p 8.26% Sainsbury (J) (SBRY) 216.20p 3.59% Frasers Group (FRAS) 691.00p 3.52% Flutter Entertainment (CDI) (FLTR) 11,830.00p 2.78% Entain (ENT) 1,319.50p 2.76% Next (NXT) 5,256.00p 2.50% Anglo American (AAL) 3,025.00p 2.49% Smurfit Kappa Group (CDI) (SKG) 3,005.00p 2.14% Tesco (TSCO) 227.90p 2.11% Mondi (MNDI) 1,538.50p 2.09%

FTSE 100 - Fallers

GSK (GSK) 1,399.80p -3.17% Shell (SHEL) 2,487.50p -1.54% Reckitt Benckiser Group (RKT) 5,652.00p -1.50% HSBC Holdings (HSBA) 482.70p -1.49% Prudential (PRU) 900.00p -1.49% Scottish Mortgage Inv Trust (SMT) 757.60p -1.20% AstraZeneca (AZN) 10,642.00p -0.93% Relx plc (REL) 2,288.00p -0.87% Admiral Group (ADM) 2,003.00p -0.84% Centrica (CNA) 79.28p -0.80%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 124.45p 11.17% IWG (IWG) 144.00p 7.46% Molten Ventures (GROW) 382.00p 6.05% Wizz Air Holdings (WIZZ) 1,942.50p 5.92% Balanced Commercial Property Trust Limited (BCPT) 95.40p 5.07% International Distributions Services (IDS) 212.10p 5.05% Baltic Classifieds Group (BCG) 149.80p 5.05% Genuit Group (GEN) 275.00p 4.96% Synthomer (SYNT) 129.50p 4.77% Ferrexpo (FXPO) 118.00p 4.70%

FTSE 250 - Fallers

Trainline (TRN) 314.00p -2.79% Moneysupermarket.com Group (MONY) 179.90p -1.91% Chemring Group (CHG) 298.50p -1.81% Morgan Advanced Materials (MGAM) 276.50p -1.78% Capricorn Energy (CNE) 250.60p -1.26% Elementis (ELM) 94.40p -0.89% Vietnam Enterprise Investments (DI) (VEIL) 541.00p -0.73% Alliance Trust (ATST) 954.00p -0.73% QinetiQ Group (QQ.) 362.80p -0.49% Supermarket Income Reit (SUPR) 103.00p -0.48%