FTSE 100 close: London markets slip into red as optimism from China stimulus wears off
London markets ran out of steam on Monday, ending in the red having traded higher for most of the day.
The blue-chip FTSE 100 index fell 0.16 per cent at 7,452.76 while the midcap FTSE 250 index fell 0.1 per cent to trade at 18,524.14.
Investors were initially buoyed by hopes that stimulus measures in China for the struggling real estate market were starting to take effect. Ailing developer Country Garden also managed to secure more time to pay off its enormous debts.
However, as the day wore on, traders grew less and less optimistic. “The declines are largely coming from waning optimism about support measures for the struggling Chinese property market,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said.
“Debt payment extensions for property giant Country Garden were taken as a real jolt of positivity earlier today, but the reality that this is likely just a temporary fix has started to set in.”
Things did not get any better after a speech from Christine Lagarde, president of the European Central Bank. Speaking at the European Economics & Financial Centre, she said “actions speak louder than words”, raising the prospect of further rate hikes.
“We will achieve a timely return of inflation to our 2 per cent medium-term target,” she reiterated.
The FTSE 100’s top fallers were insurance firm Admiral, which fell 1.9 per cent, and chemicals firm Johnson Matthey, which slipped 2.2 per cent.
HSBC and Standard Chartered, both of which have significant exposure to China, ended lower, falling 0.5 per cent and 1.2 per cent respectively.
On the FTSE 250, CMC Markets spiked after appointing Albert Soleiman as its new CFO, before falling 1.3 per cent.
US markets were closed today for Labor Day.