FTSE 100 rallies to cancel out yesterday’s losses
London’s FTSE 100 rallied during opening exchanges this morning to cancel out sharp losses on the blue-chip index yesterday, led by fears over the fallout if Chinese property developer Evergrande collapses.
The capital’s premier index climbed 1.04 per cent to 6,975.53 points, above its closing of 6,903.91 points.
Global markets sold off sharply yesterday, driven by concerns over the ramifications if Evergrande, the heavily indebted property developer, folds. The FTSE lost 0.86 per cent.
Miners and industrials absorbed sharp losses, triggered by investors betting demand for iron ore and other raw materials used in construction could plummet if Evergrande’s troubles spread to the rest of China’s construction sector.
Fears about the impact of Evergrande are lingering, said Russ Mould. investment director at AJ Bell.
“The challenge for the markets is trying to guess how Beijing might react, particularly after its notably strident approach in recent months when it comes to the technology industry. Will it be similarly strict with the property sector?”
China markets were still closed. Japan’s Nikkei slid 2.17 per cent and Hong Kong’s Hang Seng rose 0.51 per cent.
On London markets, blue-chip miners Antofagasta, BHP and Glencore all surged more than two per cent.
The best performer on the FTSE 100 in the morning was British Airways parent company, IAG. rising 6.14 per cent.
The mid-cap FTSE 250 was lifted by transport firms National Express and Stagecoach after it emerged the two are considering an all-share merger.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Consolidation in the hard hit travel sector has been expected and it appears the bus coach and rail business is ripe for restructure.”
Wall Street nursed heavy hits yesterday, with three of the US’s benchmarks closing down more than 1.60 per cent, led lower by sentiment being poisoned by Evergrande concerns.