FTSE weakens on China threat

Instead of the conciliatory tone on China trade talks that the market has been hoping for President Trump opted for the tougher approach in his comments yesterday, knocking risk sentiment.

Instead of the conciliatory tone on China trade talks that the market has been hoping for President Trump opted for the tougher approach in his comments yesterday, threatening to increase tariffs if the current round of Sino-US negotiations doesn’t produce some sort of an interim agreement. The Chinese delegation has been pushing for a rollback in tariffs and recently said that the US side had agreed to it, something US negotiators and Trump have denied. Now the two sides are back at loggerheads and investors’ sentiment is sinking.

Coca Cola shoots up as pre-Christmas revenues rise

The FTSE is nearly half a point lower – and sliding - with ITV,  insurers and miners all trading lower, the latter hardest hit by China comments. ITV saw some profits being taken off the table after yesterday’s post-trading update rally while trade tensions and the escalation of riots in Hong Kong put HSBC and other major banks under pressure. 

Coca Cola provided a rare bit of counterbalance, shooting to the top of the index after reporting a solid quarterly increase in revenue. Sales in the fourth quarter have already started accelerating ahead of the busy pre-Christmas period.

Sterling firms against euro   

Sterling is trading in synch with election news, rising against the euro after polls showed that the Conservatives have increased their lead over Labour in the last three days. The pound is reacting the most to the prospect of a simple majority and a stable government and any news pointing to a hung parliament is causing more volatility. The pound dipped against the dollar in early trade but has since recovered slightly.

Related Articles

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.