Thursday, September 23

China’s regulatory crackdown drives European stock sell-off, Reckitt falls 9% – live | Deal

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

Aberdeen-based train and bus operator FirstGroup has announced that its chief executive, Matthew Gregory, intends to resign after their annual meeting, in a win for shareholders. President David Martin will lead the firm as interim CEO as he seeks a permanent replacement.

The largest shareholder in FirstGroup, a US hedge fund, had demanded the resignation of the trucking company’s chief executive and two board members after failing to prevent the sell-off of its US businesses.

Coast Capital, the New York-based hedge fund that owns about 15% of the group, had opposed the sale of $ 3.1 billion of the FirstStudent and First Transit businesses to the Swedish group EQT, arguing that the price was too low for school and urban bus services.

Meanwhile, House prices in the UK They hit a new record of £ 230,700 in June and are now 30% higher than the peak they reached before the 2008 financial crisis, according to real estate website Zoopla.

European securities markets They have started the week cautiously, pressured by a pessimistic Ifo business survey for Germany and concerns about Delta’s rising infection rates. Cases in the UK are still much higher, but still falling, for the sixth day in a row. On Tuesday, the FTSE 100 index fell 30 points, or 0.4%, to open at 6,694, while European stocks also fell.

On Wall Street, the S&P 500 and the Nasdaq set new record highs on Monday despite a drop in new home sales in the United States. Microsoft and Apple are expected to report positive results today.

In Asia, most stocks followed the lead of the United States on Tuesday, with Japan’s Nikkei almost 0.5% ahead and the Australian market gaining 0.4%. Shares in China and Hong Kong fell after a regulatory crackdown in Beijing. Furthermore, data from China showed that industrial earnings growth slowed to 20% year-on-year in June. The Shanghai Composite Index fell 2.5%, while Hong Kong’s Hang Seng lost 3.4%.

Michael Hewson, Chief Market Analyst at CMC Markets UK, explains:

Concerns about overreaching by Chinese regulators gave equity markets a cautious start yesterday. The clampdown on various sectors within the Chinese economy that depend on foreign investment has led to a capital flight from Chinese equities, particularly those listed abroad, raising concerns about which other sectors could be next. This caution has continued in Asian markets this morning with the Hang Seng sinking to a nine-month low.

[In the US:] Given that Microsoft and Apple are expected to post some bullish earnings numbers later today, expectations are high that even with today’s decent results already included, and there is little doubt that in the absence of other alternatives, it is likely that any drop is accepted. .

Also comes

In a quiet week for UK economic data, today’s highlight is the release of the CBI’s Latest Retail Sales Survey for July. This will provide an update on retail activity at the beginning of the third quarter following the moderate June growth of 0.5% reported in official retail sales figures last Friday.

As the latest meeting of the US Federal Reserve gets underway in Washington DC, we get US Consumer Trusted Numbers for July, which is expected to decline somewhat from the June peak of 127.3. Investors are waiting for more clues as to when US stimulus could start to wane when Fed Chairman Jerome Powell holds a press conference at the end of the meeting on Wednesday night.

Quill Intelligence’s Danielle DiMartino Booth says:

We expect Jay Powell to reiterate that the downsizing discussion is underway, but that it is too early to reveal a specific date.

The agenda

  • 9.30 a.m. M. BST: UK trade data
  • 11am BST: UK CBI Retail Sales Survey for July (forecast: 21)
  • 1:30 p.m. BST: US Durable Gods Orders for June (forecast: 2.1%)
  • 2pm BST: US House Prices for May
  • 3:00 pm BST: US Conference Board Consumer Confidence for July (forecast: 123.9)

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