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China fears weigh on FTSE after US hits all-time high

China fears weigh on FTSE after US hits all-time high

The FTSE 100 has fallen into the red as bullish sentiment cooled following all-time highs hit by US markets yesterday, with fears over China reducing stimulus weighing on miners.

The UK blue-chip market fell 32 points, or 0.4%, to 7,491 as miners dipped after the price of industrial metals slumped. Fears that top metals consumer China would ease stimulus policy weighed.

Rio Tinto (RIO) fell 1% to £46.08, Glencore (GLEN) was down 0.3% to 336p and BHP Group (BHP) dipped 1% to £18.56.

Oil majors Shell (RDSb) and BP (BP) retreated from yesterday’s multi-month highs, down 1% to £25.19 and 2% to 574p, as the crude price fell from yesterday's high, trading at $74.30 a barrel.

All-time closing highs for the US S&P 500 and Nasdaq indices yesterday failed to enthuse investors elsewhere.

'The S&P 500 posted a fresh all-time closing high yesterday but the follow-through in Asia did not materialise,' said Neil Wilson, chief market analyst at Markets.com.

'It does not look like the all-time highs for the US markets are a catalyst for a ramp elsewhere as it does rather look like US exceptionalism at work.'

Associated British Foods (ABF) was among the FTSE 100 risers, climbing 2% to £25.60 after reporting profit growth of 25% at its fast-fashion retailer Primark in its first-half period, thanks to a greater amount of selling space and improved margins. 

‘That’s quite impressive considering that revenue only grew by 4.4%,’ said AJ Bell investment director Russ Mould. ‘Its challenge is to keep flexing its muscles by buying material at the best price, keeping tight stock management and avoiding discounts to protect margins.’

The London-listed shares of Irish building materials group CRH (CRH) rose 1% to £29.97, after a strong first-quarter led the company to announce more share buybacks. 

The FTSE 250 edged up 20 points, or 0.1%, to 19,927, with precious metals miner Centamin (CEY) jumping 10% at 88p after first-quarter production beat expectations. 

JPMorgan analyst upgrades boosted insurers Saga (SAGA) and Hastings (HSTG), up 5% to 60p and 2% to 222p respectively. However, a downgrade from the investment bank on their larger FTSE 100-listed rival Direct Line (DLGD) knocked it down 1% to 342p. 

On the Alternative Investment Market, Boohoo (BOO), another fast-fashion retailer with strong figures, rose 5% to 228p. 

While full-year pre-tax profits came in below consensus at £59.9 million, revenues rose by 48%, though the forecast for the year ahead is more conservative, at between 25% and 30%. 

‘The group stated that US expansion spearheaded by their Nasty Gal brand continues to be successful,’ said Graham Spooner, investment research analyst at The Share Centre. ‘There was also news that its Burnley distribution centre extension had been completed and that PrettyLittleThing has relocated to a larger distribution centre in Sheffield helping to increase productivity and scale.’

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