Lunch time latest
Here are the main stories in the markets this lunch time:
• The FTSE 100 is down 129 points, or 1.8%, to 6,843. Mining and Asia-focused stocks are leading the index lower amid more evidence of a slowdown in China’s property sector. Shares in debt heavy Chinese developer Evergrande skidded in Hong Kong, spooking the market.
• British Gas-owner Centrica is bucking the trend after reassuring investors it is in a “robust financial position” and “well hedged for the coming winter.” Shares are 3.6% higher.
• SSE has denied reports it is poised to break-up the company after a story over the weekend suggested activist investor Elliot Management had swayed the board. SSE said: “There has been no decision to break up the SSE group. The board remains fully focused on strategic choices which will drive shareholder value from the wealth of net zero opportunities the company is creating.” Shares are broadly unchanged.
• Bitcoin is slumping. The world’s largest cryptocurrency is down 9% to $43,055 as the Evergrande panic prompts investors to de-risk their portfolios.
Neil Wilson, chief market analyst at Market.com, says: “China risks abound with eyes on the Evergrande contagion. Markets also have one eye on inflation and the Fed meeting this week, plus the German election coming on Sunday. Many people – most investors seemingly – have been eyeing a correction in Sep/Oct after such a solid ramp this year and they’re getting one, it seems.
“If you have the Fed post max-accommodation – that is, on a path to tightening not loosening, inflation sticking around much more than optimists had thought, earnings growth stalling, and the economy past peak growth, you have the kind of perfect powder keg for a pullback and Evergrande may be the spark to set it off.”