London Markets: Miners sell off in London as as China’s Evergrande gets investors worried again
London markets were feeling the pains of a faraway potential problem on Thursday, as the heavily weighted mining sector got hit by fresh troubles for China’s property China Evergrande.
Shares of the indebted company
tumbled 13% in Hong Kong after it announced a deal to sell its property management arm to a smaller rival had collapsed.
“The heavily indebted property developer failed to complete a key asset sale to leave it teetering amid fears of wider contagion from a potential collapse of the business,” said AJ Bell financial analyst Danni Hewson, in a note to clients.
“This hit stocks with Chinese exposure, most notably the mining sector. China is the world’s biggest consumer of many metals and minerals,” added the analyst.
The FTSE 100 index
fell 0.3% to 7,195, led by mining company BHP Group
which lost 3%. Anglo American
and Rio Tinto
shares saw similar losses, while Glencore
fell more than 2%.
Other stocks falling included pest killer Rentokil Initial
with those shares down over 2%. Rentokil reported third-quarter organic revenue slightly below consensus expectations, though comments over its outlook “reassure that the group is on track to deliver a FY performance in line with guidance provided at the interims,” said a team of Jefferies analysts led by Kean Marden.
Shares of Barclays
eased about 0.4%. The U.K. bank reported gains in third-quarter pretax profit and total income ahead of market views. Citi analysts Andrew Coombs and Saifur Rahman said while the bank saw another good quarter and “capital return prospects look increasingly attractive,” they are cautious on the sustainability of the investment bank revenues and forecast expect flat group revenues in 2022 versus consensus of 2% growth.
In the midcap FTSE 250
the bigger gainer was Renishaw
which climbed 11%, and the largest midcap decliner was Lancashire Holdings
which fell 6%.
The British pound
fetched $1.3869 versus the previous close of $1.3866.