Market Report: Markets fall into the red as fears on China return

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Hopes of a sustained turnaround for global stock markets were dashed as trading screens were once again awash with red.

After yesterday’s mini-rally, the FTSE 100 was back in familiar territory, down 79.81 points, or 1.3%, to 6001.53.

More volatility from the Shanghai Composite, which finished lower, triggered another sell-off in Europe as fears over China’s growth linger.

Low trading volumes suggested investors were staying on the sidelines, having seen Wall Street spoil “Turnaround Tuesday” by retreating.

Nour Al-Hammoury, chief market strategist at ADS Securities, said China’s move to cut interest rates didn’t impress US investors and was seen “as a knee-jerk reaction rather than strategic direction”.

He added: “The only move left may now be the launch of another significant [quantitative easing] programme by one of the central banks.

“China has done its job, but the others will have to act to avoid further selling.”


The People’s Bank of China cut interest rates on Tuesday

China’s demise is good news for Crispin Odey, whose main hedge fund has bet heavily on its stock market crashing, after suffering a bloody nose from rising oil prices in April.

Citigroup analysts halted a mining recovery with gloomy predictions for the sector and a spate of downgrades.

Among the losers were Glencore, down 3.8p to 140.50p, Antofagasta, off 14.82p to 564.68p, and Anglo American, 15.7p lower at 668p.

Asia-focused bank Standard Chartered fell 19.7p to 725.3p, and luxury fashion group Burberry, for which China is a vital market, dropped 28p to 1364p.

Half-year figures from APR Energy, off 6.37p to new all-time lows of 76.63p, underlined the temporary power provider’s troubles. It swung to a loss of $64.5 million (£41.2 million) after bailing out of its project in conflict-torn Yemen and Libya.

Fastjet, part-owned by easyJet founder Sir Stelios Haji-Ioannou, flew 3.5p higher to 97.5p as the AIM-listed African airline bought its first plane, having been leasing aircraft since its inception three years ago.

Kalibrate Technologies, 2.5p better at 104.5p, signed a deal with supermarket group Morrisons which will use its technology to bring live prices to its petrol stations.

Another profit warning hit Mobile Streams, which plunged 2.15p or 34% to 4.1p. The company, whose chairman is Roger Parry — former chief executive of radio giant Clear Channel which was sold for $27 billion in 2006 — now expects flat underlying earnings.

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August 26, 2015 |
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