ADVFN Morning London Market Report: Monday, October 18, 2021

London Open: Stocks Fall After China’s Growth Numbers


London stock It fell in early Monday trading as investors digested disappointing growth from China.

At 0845 BST, FTSE 100 It was 7,222.38, down 0.2%.

Previously released numbers National Statistics Bureau China’s economic growth shows a sharp slowdown in the third quarter amid power shortages and supply chain problems.

Growth slowed from 7.9% in the previous quarter to 4.9% in the three months to the end of September, marking the weakest growth of the year. This was below economists’ expectations for a 5.0% increase.

Growth also slowed sharply from 1.2% in the second quarter to 0.2% in the third quarter, on a seasonally adjusted quarterly basis.

Pantheon Macro Economics Economist Craig Bosam said the y / y slowdown was always on the card, given the basic effects, but the q / q slowdown reflects the headwinds that occurred in the third quarter.

“A clear candidate for such a headwind is the energy crisis that occurred in September, and a closer look at the subcomponents shows that the GDP growth rate of the secondary industry slowed particularly sharply from 7.5% to 3.6% year-on-year. I did, “he says. Said.

“On the other hand, the GDP growth rate of the tertiary industry has also slowed significantly from 8.3% to 5.4% y / y. Most of this decline may be due to the underlying impact, but nonetheless. , I think this also shows the chills that are spreading throughout the real estate sector. We have to wait for a more detailed industry breakdown to see the drivers, but the monthly data seems to support this interpretation. . “

Data show that September industrial production increased 3.1% from 5.3% in August, the slowest growth since March 2020, and manufacturing was hit hard by supply chain disruptions and chip shortages. ..

Retail sales increased from 2.5% in August to 4.4% year-on-year in September. After a surprisingly strong service survey, Bossam said there was a rebound on the card due to a reduction in Covid outbreaks and the accompanying relaxation of restrictions.

In the UK Stock market, Travel-related stocks plunged with British Airways’ parent company after rising at the end of last week IAG, Wizz Air, carnival When EasyJet All low.

Conversely, the gambling software group Playtech Rapidly increased by nearly 60% after agreeing to purchase by Australian game console maker Aristocrat Technologies With a £ 2.1 billion transaction. Sydney-based aristocrats pay 680p per share. This is a 58% premium on the company’s last closing price on October 15.

Beverage maker C & C group After upgrading to “overweight” with, fizz higher Barclays, in the meantime Drax Was trading higher after upgrading from “hold” to “purchase” in Jeffreys..

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European Open: Weak Chinese data will reduce market share. THG stock rises

European stocks fell on Monday as weak economic data from China fueled concerns about the pace of recovery after the pandemic.

The Pan-European STOXX 600 Index initially fell 0.48%, with all major regional stock exchanges declining.

The Asian market fell after data showed that China’s economy grew 4.9% in the third quarter. These are power shortages, supply chain issues, the spread of Covid infections, and China’s Evergrande debt repayment issue.

Luxury stocks published in China LVMH When Kering Both have fallen by more than 3% after China’s President Xi Jinping called for a consumption tax hike.

“Earlier this year, it was widely expected that China’s economy would grow annually at about 6%, which was considered a pessimistic aspect at the time. In the third quarter of this morning. Given the sharp deceleration seen in the numbers, this now seems a bit too optimistic. ” CMC market Analyst Michael Hughson.

“It’s hard to understand why GDP in the third quarter of this morning was disappointed by the various port turmoil seen throughout the quarter due to tight limits, supply chain problems, rising electricity costs and the Chinese economic outage. Not. “

“Economic performance has not been helped by various crackdowns by Chinese authorities on different parts of the economy and issues surrounding the Evergrande Group and the real estate sector.”

UK online retailer THG It rose 3% after removing its founder’s “golden share” and saying it wanted a premium listing after last week’s stock plunged by more than a third.

Monday Newspaper Summary: Ford, Amazon, Online Sales Tax

Ford has announced that it will invest £ 230m in its Merseyside transmission plant to upgrade to manufacture parts for electric vehicles. This is an important factor for the automotive industry in northern England. The investment of a US automaker will help maintain the employment of about 500 people at Knowsley’s Halewood plant, which currently manufactures transmission systems for gasoline and diesel vehicles. Ford will receive about £ 30m worth of British government support, according to sources familiar with the negotiations. – Guardian

Amazon offers up to £ 3,000 a sign-up bonus in the UK’s labor shortage region to attract workers in time for the surge in Christmas demand. The Food and Beverage Federation says there is a “labor dispute” for Christmas and Amazon is about to hire 20,000 temporary staff. Many food and hospitality companies are unable to compete with the wages currently offered by online giants, which can affect Christmas delivery and supply. – Guardian

After delaying the review of business rates, Rishi Sunak is stepping up its online sales tax plan to level the competition between tech giants and high street retailers. Treasury officials have accelerated the work on new e-commerce taxes in the past few weeks, investigating potential tax details such as which products and services are covered, sources told The Daily Telegraph. – Telegraph

A battery storage developer spun out from the University of Sydney will be listed in London and will raise more than £ 16m to commercialize the technology. Australia-based Gelion Technologies has already raised cash from investors such as Regal Funds Management and Elphinstone Group, and is expected to be worth about £ 120 million when it comes to Aim next month. – Telegraph

The restaurant group behind Quaglino’s and Coq d’Argent in London, and 20 Stories in Manchester estimates that staff shortages account for 10% of revenue. Des Gunewardena, Chairman and CEO of D & D London, said the UK’s 1,700 staff are already short of about 100-150 employees, and the problem becomes even more serious as Christmas approaches. – Times

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ADVFN Morning London Market Report: Monday, October 18, 2021

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