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London markets felt the pain of a distant potential problem on Thursday as the heavily weighted mining sector was hit by new problems for China’s real estate, China Evergrande.
Shares in indebted company 3333, -12.54%, fell 13% in Hong Kong after it announced a deal to sell its property management business to a smaller rival.
“The heavily indebted property developer was unable to complete a major asset sale to sway it amid fears of further contagion from a possible collapse of the company,” said AJ Bell financial analyst Danni Hewson in a client release.
“This hit stocks with Chinese exposure, particularly the mining sector. China is the world’s largest consumer of many metals and minerals, ”added the analyst.
The FTSE 100 Index UKX, -0.44% fell 0.3% to 7,195, led by mining company BHP Group BHP, -3.45% BHP, -3.78%,
the 3% lost. Anglo American AAL, -3.03% and Rio Tinto RIO, -3.52% RIO, -3.36% stocks posted similar losses while Glencore GLEN, -2.39% fell more than 2%.
Other stocks including Rentokil Initial RTO pesticides fell -3.31%,
with these proportions down over 2%. Rentokil reported organic sales for the third quarter slightly below consensus expectations, although comments on its outlook “reassure you that the group is on track to deliver fiscal year performance in line with interim guidance,” said a Team of Jefferies analysts led by Kean Marden.
Stocks of Barclays BCS, -1.11% BARC, -0.34% were down 0.4%. The UK bank posted earnings before taxes and total earnings before market assessments in the third quarter. Citi analysts Andrew Coombs and Saifur Rahman said although the bank had another good quarter and “the outlook for return on investment is getting increasingly attractive,” they are cautious about the sustainability of the investment bank’s returns and forecast flat group returns for 2022 versus consensus of 2% growth.
In the midcap FTSE 250 MCX, -0.14%,
the bigger winner was Renishaw RSW, + 12.93%,
which is up 11%, and the biggest mid-cap drop was Lancashire Holdings LRE, -6.95%,
which has fallen by 6%.
The British Pound GBPUSD, -0.06%, hit $ 1.3869 from the previous closing price of $ 1.3866.