It can be assumed that the market players were eagerly waiting for the GDP numbers from China. As was broadly anticipated by the market participants, the Chinese economy slowed down which might have raised fears about a slowdown in the global economy. Earlier also the weaker exports and imports data from China raised concerns in the minds of the global investors. In 2018, China witnessed a growth of 6.6%. The slower growth of the Chinese economy indicates that the Chinese officials need to launch more measures which could support the broader economy. The slower growth also indicates that trade war between the US and China has severely impacted the broader economy of China. China has reported lowest birth rate in last 70 years. The birth rate stood at 10.94 per thousand in 2018, down from 12.43 per thousand in 2017.
At UK front, with about 67 days remaining into the Brexit, May returned to the parliament to present what she is going to do next. She tried to ditch cross-party talks and wanted to rewrite the Irish backstop, what EU has long-back rejected. Centre point of the latest discussion was Irish backstop. In a conference held on Sunday, May told cabinet ministers that she is planning to do something about the backstop but did not specify what. No one knows, how it will end, but the probability of a no-deal Brexit is tremendously higher than anyone has ever thought. EU lawmakers have so far denied reopening Brexit negotiation, but have hinted they could postpone the Brexit if she (May) changes her “red lines” on leaving EU’s customs and blocking free movement of citizens. At the moment, May has indicated concerns over another referendum while she has flagged to waive off £ 65 fee for EU citizens for a permanent stay in the UK. On the other hand, mixed responses are erupting on her strategic decisions.
The global disturbances are likely to weigh on the companies as well. Last week, Societe Generale came forward and announced that its Global Markets and Investor Services business is expected to be impacted by unfavourable market environment. During the day, FTSE 100 Index was trading in red (down 0.16%) while STOXX 600 also traded marginally lower at 356.30, down 0.21%. FTSE 100 however, closed at 6,970.59, up 2.26 (0.032%) on January 21, 2019.
Meanwhile, China’s state-run CGN, a nuclear energy company, is in talks with Rolls-Royce, a UK based engineering firm for the supply of equipment for power planned for the Essex coast. There are reports that highlight that this deal is seen as a part of efforts to ease national concerns about the power projects.
At the time of writing, GBP/USD was trading at 1.29, edging up slightly and EUR/GBP was trading at 0.88, down slightly. GBP is expected to remain tumultuous until Brexit gets sorted.
Stocks like Melrose Industries PLC (MRON.L), Spirax-Sarco Engineering PLC (SPX.L), Hargreaves Lansdown PLC (HRGV.L) are among the top gainers on FTSE 100 index and up by 1.92%, 1.25% and 1.5% respectively. On the other hand, stocks like Kingfisher PLC (KGF.L), Rentokil Initial PLC (RTO.L) and Antofagasta PLC (ANTO.L) were among the laggards on FTSE 100 index and down by 4.01%, 2.11%, and 2.8%, respectively.
During the day, sectors trading in green on FTSE 100 Index included Energy, Healthcare and Industrials; and on the other hand, sectors like Consumer Cyclicals, Consumer Non-Cyclicals, Telecommunications, and Financials were among the laggards and pulled the FTSE 100 Index a bit down.
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