London’s blue-chip stocks continued to slide at lunch as the Bank of England’s (BoE) ‘Super Thursday’ did little to stem this morning’s losses.
Having dropped 35 points in early deals, the FTSE 100 had lost almost 90 points, or 1.4% to 6,139 by lunch.
Starting the rout was core machinery orders in Japan, which declined for a second straight month.
This was followed by Chinese producer prices, which fell by a bigger-than-expected 5.9%.
Connor Campbell at spread betting firm Spreadex, said: “It appears that the investors’ nascent confidence took a bit of a knock, as China displayed further signs of its slowdown.”
This afternoon, “There was little surprise that the Bank of England chose not to act on interest rates, as uncertainty reigns supreme over further fears from China,” according to Dennis de Jong of forex firm UFX.
Howard Archer at HIS Global Insight said: “Significantly, none of the other eight MPC members joined Ian McCafferty in voting for an interest rate hike at the September meeting.”
Much worse than expected UK production data on Wednesday reiterated a growing belief among economists that a rate rise is unlikely this year.
The news did little to settle investors, and on the corporate front it got little better.
Argos owner Home Retail Group (LON:HOME) said like-for-like sales at the retailer fell 2.8% to £897mln in the second quarter due to a decrease in sales of electrical goods driven by TVs , tablets and white goods such as washing machines and fridges. Shares dropped more than 5% to 141p.
Elsewhere, supermarket chain Morrisons (LON:MRW) softened 3% or 5p to 170p as it confirmed it is culling 11 stores to rectify some of its issues after reporting a 50% slide in profit in its interim results.
It wasn’t all doom and gloom, as Barratt Development (LON:BDEV) led the housebuilders higher.
According to data from Lloyds Banking Group's Halifax division, the UK housing sector registered its biggest monthly increase in 15 months.
House prices jumped 2.7% in August, the fastest monthly increase since May last year. Shares gained 2.5% or 17p to 655p.
In small caps, ITM Power (LON:ITM) rocketed 22% higher to 30p as it signed a deal with Shell for the delivery of three hydrogen refuelling stations on three Shell retail forecourts in the UK for the refuelling of electric cars.
Also up was 88 energy (LON:88E), which sealed a rig contract which means the first well at Project Icewine, on Alaska’s North Slope, is due to spud in October. Shares rose almost 10% to 0.6p.
Conversely, non-life insurance company Gable Holdings (LON:GAH) lost 13% to 22p as it saw a 33% rise in written premiums but swung to a £2.4mln loss in its interim results from a £2.5mln gain over the same period in 2014.