London midday: Stocks flat after weak Chinese data, US recession warning

(Sharecast News) - London stocks were little changed come midday despite the release of disappointing Chinese data and warnings that the US could be headed into a recession. The FTSE 100 was off just three points at 7,415.08 while the second-tier index was drifting lower by 37.16 points to 19,884.98.

In parallel, cable was trading at its lowest level since 2020.

Data released overnight showed Chinese industrial output shrank unexpectedly in April as the output of automobiles plummeted at an annual rate of nearly 32%, alongside an 11% year-on-year drop in retail sales.

Economists blamed Covid-19 mobility restrictions for the poor data.

Worth noting, during the preceding week there had been some speculation that Chinese President Xi Jinping could come under fire due to his inability to contain the pandemic.

And in the UK, Bank of England Governor, Andrew Bailey, rightly or not, was expected to be grilled by the Treasury Select Committee for recent multi-decade high inflationary readings, starting from 1515 GMT.

Against that backdrop, at the weekend, former Goldman Sachs chief executive officer, Lloyd Blankfein, said that there was a "very, very high risk" that the US economy could fall into a recession, although it wasn't certain to happen.

Blankfein blamed high inflation on the stimulus introduced to cushion the blow from the pandemic, supply chain disruptions, lockdowns in China and the war in Ukraine.

"The Fed has very powerful tools. It's hard to finely tune them and it's hard to see the effects of them quickly enough to alter it," he told CBS News on Sunday.

"But I think they're responding well."

On that note, strategists at JP Morgan forecast that stocks were set to continue moving higher now that peak Fed hawkishness had been reached and thanks to better than expected profits - if a recession could be avoided.

In corporate news, High Street baker Greggs has posted a 15.8% rise in like-for-like sales in the 10 weeks to May 14 at its company-managed stores, but said it expected figures to normalise against comparisons with more "robust" trading periods last year.

Total sales for the period rose to £495m from £378m. The company, famed for its range of sausage rolls and other pastries, held guidance, but said cost pressures were increasing as a result of inflation and the cost-of-living crisis.

Credit reference agency Experian has agreed to acquire a 51% stake in Brazilian fintech group MOVA Sociedade de Empréstimo entre Pessoas as part of a BRL 40.0m (£6.45m) cash deal.

Experian, which said that it had purchased the stake from private investor Érico Sodre Quirino and founder and chief executive Roberto Tesch, highlighted that it also held a call option to acquire the remaining 49% of MOVA between 2026 and 2028, whilst the sellers had also put an option exercisable during 2029.

Market Movers

FTSE 100 (UKX) 7,420.93 0.04% FTSE 250 (MCX) 19,886.26 -0.18% techMARK (TASX) 4,307.97 -0.05%

FTSE 100 - Risers

Fresnillo (FRES) 743.80p 2.82% Glencore (GLEN) 474.10p 2.76% Phoenix Group Holdings (PHNX) 632.40p 2.53% Informa (INF) 551.60p 1.96% Antofagasta (ANTO) 1,374.50p 1.93% Prudential (PRU) 978.20p 1.90% Airtel Africa (AAF) 140.10p 1.82% BAE Systems (BA.) 753.80p 1.70% Sainsbury (J) (SBRY) 242.80p 1.68% Anglo American (AAL) 3,359.00p 1.65%

FTSE 100 - Fallers

Aviva (AV.) 394.25p -26.60% JD Sports Fashion (JD.) 127.00p -3.39% Rolls-Royce Holdings (RR.) 81.25p -3.10% Royal Mail (RMG) 328.90p -2.72% Scottish Mortgage Inv Trust (SMT) 784.40p -2.66% Reckitt Benckiser Group (RKT) 6,298.00p -2.48% RS Group (RS1) 900.00p -2.39% Smith (DS) (SMDS) 307.20p -2.35% Kingfisher (KGF) 249.80p -2.15% Smurfit Kappa Group (CDI) (SKG) 3,137.00p -2.09%

FTSE 250 - Risers

HGCapital Trust (HGT) 405.00p 3.85% Polymetal International (POLY) 246.80p 3.70% Plus500 Ltd (DI) (PLUS) 1,565.00p 3.57% Ferrexpo (FXPO) 152.20p 3.33% Centrica (CNA) 79.60p 3.32% Drax Group (DRX) 774.00p 3.27% Apax Global Alpha Limited (APAX) 185.20p 2.89% Abrdn Private Equity Opportunities Trust (APEO) 461.00p 2.44% TP Icap Group (TCAP) 122.20p 2.43% ICG Enterprise Trust (ICGT) 1,076.00p 2.09%

FTSE 250 - Fallers

Kainos Group (KNOS) 1,055.00p -6.72% Diploma (DPLM) 2,478.00p -4.84% Wizz Air Holdings (WIZZ) 2,924.00p -4.66% Baltic Classifieds Group (BCG) 149.40p -4.60% Network International Holdings (NETW) 217.20p -3.72% Genuit Group (GEN) 413.00p -3.17% Greggs (GRG) 2,112.00p -2.67% Morgan Sindall Group (MGNS) 1,952.00p -2.64% 888 Holdings (888) 187.10p -2.60% Weir Group (WEIR) 1,475.00p -2.41%