A weak showing from Hong Kong’s Hang Seng cast a dark cloud over the start of the new trading week, with the index falling 2.3% as investors dumped holdings in real estate, consumer cyclicals and basic materials companies.
China’s post-Covid economic reopening is proving to be less robust than hoped at the start of the year, and now it seems that investors are growing tired of waiting for the Chinese government to announce new stimulus measures.
Danni Hewson, head of financial analysis at AJ Bell, said: “There are concerns that the Chinese housing market will remain sluggish and that has weighed on sentiment towards all things related to real estate and construction, including miners over fears that commodities demand could weaken.
“Names like Glencore and Anglo American acted like an anchor on the FTSE 100, dragging the UK index down 0.2% to 7,647. Prudential was also caught up in the negativity around China, given it is a key territory for the life insurer. It was the same story for HSBC, slipping 1.3%.
“UK housebuilders and banks gave up some of their recent gains as investors locked in some profits after one of the best weeks for the FTSE in a long time.”