London’s stock markets ended the week on a lackluster note, marking the second consecutive week of declines, as investor sentiment was dampened by concerns over China’s economy and sector-specific losses in key UK companies.
The blue-chip FTSE 100 managed to edge up 0.2% on Friday but still recorded a 0.3% decline for the week. The FTSE 250, home to many mid-sized UK firms, fared worse, falling about 1% over the week. Industrial metal miners were hit the hardest, with the sector down 3.5% as base metal prices tumbled due to the absence of specific fiscal stimulus from China, the world’s largest consumer of industrial metals.
Among the biggest decliners was Sainsbury’s, whose shares dropped 5.9% after the Qatar Investment Authority moved to sell £306 million ($399 million) worth of shares, contributing to the overall market decline. BP also saw a 0.3% dip after warning that weak refining margins could reduce its third-quarter profit by up to $600 million.
There was little comfort for investors from economic data, which showed the UK economy grew by 0.2% in August after two months of stagnation. The modest growth aligned with economists' expectations but did little to reverse the week’s negative trend. ING economist James Smith commented that while the economy seems to be growing at a reasonable pace, the strong quarterly GDP readings seen earlier in the year are unlikely to continue through the latter half.
Other notable movers included Jupiter Fund Management, which slipped 1.8% after reporting third-quarter outflows of £1.6 billion. Meanwhile, Saga surged 9.1% on news that Belgian insurer Ageas is in exclusive talks to form a long-term partnership with the company, bolstering the over-50s holiday group.
