London equities dipped on Wednesday, amid the escalating trade wars between the U.S. and China.
How did markets perform?
The U.K.’s FTSE 100 UKX, -0.04% dipped by 0.2% to 7,288.81. The index of leading shares had ended the previous session up 1.1%.
The pound GBPUSD, -0.1472% remained flat at $1.2916, having ended Tuesday down 0.5%.
What’s moving the markets?
London markets dropped after Chinese President Xi Jinping’s first major address since U.S. President Donald Trump raised tariffs on $200 billion of Chinese goods. During his speech, the Chinese president urged countries not to “close their doors and hide behind them”, adding that civilizations didn’t need to “clash with each other”, CNN reported.
This comes a day after Trump played down tensions between the U.S. and China over trade, calling the situation a “little squabble”.
Data on China’s economic activity in April lengthened the shadow over country’s lagging economy. Figures released on Wednesday showed retail sales grew 7.2% year-on-year, down from 8.7% the previous month—the slowest since 2003. Industrial growth also slowed to 5.4% from 8.5%.
Meanwhile, in the U.K., Prime Minister Theresa May has told the opposition leader Jeremy Corbyn that she will bring her thrice-rejected withdrawal bill back before the House of Commons on June 3. In a meeting with Corbyn on Tuesday, May said she wanted to see the bill approved by ministers before the House’s summer break in late July.
Which stocks are active?
Shares in Kingfisher PLC KGF, -2.32% slipped 2.6% after the retailer announced sales climbed by 0.4% in the first quarter. The Royal Bank of Canada described these results as “underwhelming”. Like-for-like comparables are “very soft given snow disruption in major markets last year,” while the company “appears to be underperforming materially in France and to a lesser extent the U.K.,” RBC said.
British catering group Compass Group PLC CPG, +2.86% moved up 2.8%, after it reported organic revenue growth of 5.5% and operating margins of 7.4%.
“It’s a brilliantly boring business, but that is key to its charm,” Nicholas Hyett, Equity Analyst at Hargreaves Lansdown. “Steady mid-single digit revenue growth converts well into profit and cash because facilities are generally provided by the customer—keeping capital requirements to a minimum,” Hyett added.
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