The London market began the week in negative territory after downbeat Chinese economic data.
The FTSE 100 Index fell 37.13 points to 6071 in early trading after Chinese industrial profits declined at their fastest annual pace in August since records began four years ago.
The industrial profits of the world’s second-largest economy fell by 8.8% last month, according to official figures and are down 1.9% for the year to date.
Profits were hit by currency devaluation and financial market volatility, which Mike van Dulken at Accendo Markets said was adding to growing worries about China's economic slowdown.
Analysts and economists will look for further evidence of financial distress when China publishes its official manufacturing figures later this week.
“It still remains far from clear how weak or otherwise economic conditions in China are, with Nike’s quarterly results showing some decent numbers in the China region,” said CMC Markets’ chief market analyst, Michael Hewson.
“However concerns remain about the weakness of the manufacturing sector, where we will get further insight later this week, with the latest Caixin manufacturing and services PMI, numbers for September, alongside the official numbers.”
Looking at the broader picture, the market is continuing to digest Janet Yellen’s comments on Thursday signalling an interest rate hike in the US.
On the corporate front in the UK, talk that Belgium's Anheuser-Busch InBev could bid about $106bn for SABMiller (LON:SAB) within days lifted shares in the latter by 137.5p to 3725.5p.
Shares in Vodafone (LON:VOD) fell 8.05p to 209.6p on news that the mobile phone group had ended asset swap talks with Virgin Media owner Liberty Global.
Scooter maker Vmoto (LON:VMT) jumped 1.25p to 14.5p as it did a deal to sell 32,000 of its scooters to a Canadian group.
Shares in Berkeley Energy (LON:BKY) gained 0.5p to 21.25p as final results from a drilling programme at its Zona 7 project in Spain produced encouraging uranium grade results.
MARKET PREVIEW
The FTSE 100 is expected to open its account for the week in negative territory following a lacklustre showing in Asia and a dull end to the trading week in the US.
Britain’s index of blue-chip stocks will fall around 30 points on open to 6,079.1, according to the spread betting firm IG.
Asia’s stock markets were rattled overnight by yet more gloomy economic data from China.
The industrial profits of the world’s second-largest economy fell by 8.8% last month, according to official figures and are down 1.9% for the year to date.
Analysts and economists will look for further evidence of financial distress when China publishes its official manufacturing figures later this week.
“It still remains far from clear how weak or otherwise economic conditions in China are, with Nike’s quarterly results showing some decent numbers in the China region,” said CMC Markets’ chief market analyst, Michael Hewson.
“However concerns remain about the weakness of the manufacturing sector, where we will get further insight later this week, with the latest Caixin manufacturing and services PMI, numbers for September, alongside the official numbers.”
At 6.30am, the Shanghai Composite was off 0.3%, while Japan’s Nikkei was down 1.2%. Australia and Hong Kong bucked the trend.
Looking at the broader picture, the market is continuing to digest the Janet Yellen’s comments on Thursday signalling an interest rate hike in the US.
Back in Europe, the election of independence candidates in the Catalonia regional election will inevitably lead to calls for a split from the rest of Spain.
Experts say it could lead to more political uncertainty across the continent – while here in the UK it will give the Scottish nationalists a boost.
The City Page…
The Financial Times kicks off with an interesting story on Saudi Arabia, which it reckons has withdrawn around US$70bn from asset managers to plug the growing deficit caused by the collapse in the oil price.
Elsewhere in the same paper, we learn the builder Countryside is hoping to use a good set of full-year results as the springboard for a £1bn cash return early next year.
The FT is also following the Energy Transfer Equity bid of Williams - a deal that will create an oil and gas pipeline company worth about US$59 billion.
It also says that Arctic oil will soon start flowing from a €5.6 billion polar platform, the Goliat, owned by Italian national champion Eni.
The Times reveals that Royal Bank of Scotland faces inquiry into ‘falsifying’ client files. It says regulators are to examine claims that it ‘edited’ customer emails, call transcripts and how it presented its “central file” record of correspondence, potentially in breach of data protection laws.
The row over the axing of power station Drax’s £1bn green conversion rumbles on with the company that owns the plant blaming the government and specifically the end to the carbon tax, the Times also reveals.
After Lewis Hamilton’s superb win in Japan there is bad news for the circus they call grand prix in today’s Telegraph. The future of Formula One’s British race is at risk after the boss of the Silverstone race track revealed that it lacks sufficient funding and needs an investor, it says.
The paper also claims embattled supermarket retailer Wm Morrison is in a legal row with a clutch of property developers over a string of supermarket sites that it has pulled out of building.
Finally, the Guardian says the Bank of England is likely to keep interest rates on hold until the middle of next year rather than raising them sooner, following a gloomier outlook for the global economy, according to the economic forecaster CEBR.