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Chinese stocks slide after factory slowdown deepens - business live

Discussion in 'Market News' started by Lily, Feb 1, 2016.

  1. Lily

    Lily Forum Member

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    Rolling coverage of the latest economic and financial news, as China’s factory sector contracts for the sixth month running


    8.33am GMT

    Good news! Spain’s factories grew at a faster pace last month, outperforming their rivals in China.

    The Spanish manufacturing PMI, which measures activity across the sector, rose to 55.4 last month, up from 53. That shows faster growth, and beats forecasts:

    Spain Manufacturing PMI (Jan) comes in at 55.4, well above expectations of 52.5

    “The Spanish manufacturing sector shrugged off uncertainty surrounding the make-up of the next government in January, posting a strong start to 2016. One key highlight was the fastest rise in new business since prior to the economic crisis, while efforts to increase stock holdings point to confidence in the near-term outlook for orders.

    8.26am GMT

    European stock markets have begun February cautiously. The FTSE 100 has dipped by 3 points, while the German DAX is down 16 points or 0.2%.

    BP is leading the fallers in London, down 1%. It is expected to report a big slump in profits tomorrow, partly due to the fall in the oil price:

    Related: BP to announce 70% collapse in profits

    8.22am GMT

    Today’s selloff came after a rough January for Chinese stocks, in which the main markets fell by over a fifth.

    Some 12 trillion yuan ($1.8 trillion) were sliced off the value of its benchmark indexes. The CSI300 and the Shanghai Composite indexes fell more than 20% each in January.

    8.01am GMT

    Here’s some reaction to the news that China’s manufacturing sector has shrunk at its fastest pace since 2012:

    ANZ’s chief China economist, Li-Gang Liu, says the factory slump will continue for some time.

    “The manufacturing sector will likely face a tough year ahead on the back of overcapacity, weakening global demand, and the government’s plans to tackle pollution.”

    “There’s a realization that for a lot of these industries, there has to be a big downsizing.

    “Rather than avoiding that issue, plans are now being made as to how workers can be laid off and looked after. We expect there’ll be some funding from the central government.”

    #China PMI drops to 3-year high (and 6 consecutive months below 50 level) https://t.co/MBsE2b51Y8 #oil #commodities pic.twitter.com/7kKuI39WGq

    It is quite concerning that the significant monetary and fiscal stimulus in 2015 has only managed to slow the rate of decline in China’s industrial activity......It is looking like it will be quite a struggle for China to even hit its lowered growth target of 6.5% for 2016.

    #China's manufacturing struggles continue. pic.twitter.com/GjKssaG7Sf

    7.49am GMT

    It’s been another bad day on the Chinese stock market.

    Shares hit a new 14 month low, after a new survey showed its manufacturing sector weakened last month.

    Related: China manufacturing sector shrinks at fastest rate for more than three years

    7.18am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    It’s a gusty morning in the City, as Storm Henry pays a visit. And traders will be hoping it blows January’s volatility away with it, after a testing start to the year.

    Our European opening calls:$FTSE 6106 up 23
    $DAX 9820 up 22
    $CAC 4419 up 2$IBEX 8823 up 7$MIB 18693 up 36

    We have the latest Spanish, Italian, French and German January manufacturing numbers, and here there has been some softening of data in recent weeks, as economic activity has dropped off.

    It’s been the same story in the UK as well with the latest January manufacturing PMI expected to come in at 51.8, down from 51.9.

    Related: Barclays and Credit Suisse to pay biggest ever fines for dark pool trading

    Related: MPs to debate whether Financial Conduct Authority is up to job of regulating City

    Continue reading...
     

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