Trade Tensions Topple FTSE 100

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Thursday, August 15: The FTSE 100(-1.13%) opened the day lower as global slowdown worries weighed on miners Evraz(-5.31%), Anglo American(-4.88%), and Antofagasta(-3.12%) following a read across from FTSE 250 miner Kaz Minerals(-15.28%). Kaz Minerals noted an uncertain short term outlook citing geopolitics and concerns regarding a slowdown in China. The miner said it was on track to meet full-year production guidance for copper & gold, expected to produce 300,000 tonnes of the former and 170,000-185,000 ounces of the latter. Equity indices came under further pressure as the day progressed, as China claimed Trump’s plans for further tariffs violated a consensus reached between the two countries in Osaka, and should the US continue to enact tariffs then countermeasures from China should not be ruled out.

Figures from the Office for National Statistics indicated that monthly retail sales volumes rose by 0.2%, well ahead of a decline forecast by a survey of economists. Sales climbed 3.3% higher for the month compared with July 2018, ahead of forecasts but lower than the 3.8% seen in June. The three months to July saw retail sales growth of only 0.5%, the lowest recorded this year and reflective of a dip in May sales.  Online sales jumped 6.9% month-on-month, their biggest rise in three years partly driven by Amazon’s “Prime Day” promotions. This data contrasted with conclusions reported by the British Retail Consortium which indicated retail spending fell in July at the fastest rate on record. In particular a stark contrast could be drawn between buoyant sales growth in the online space and store sales of household goods; the latter experienced the sharpest fall in two years of -5.4% which was attributed to warmer weather. One crumb of comfort for the high street came in the form of department store data which saw growth for the first time this year at 1.6% month-on-month.

European equities were lower at the close, with the FTSE 100 -1.13%, the CAC 40 -0.27% and the DAX 30 -0.70%.

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