Proactive Investors -
- FTSE 100 sheds 95 points
- Vistry profit warning hits housebuilders
- Miners fall as China stimulus measures underwhelm
Diageo down as drink makers hit with China brandy import rules
Diageo PLC (LON:DGE) fell 1.8% on Tuesday in line with drink makers after China firmed up import rules on European brandy.
Anti-dumping measures will see brandy makers on the continent required to put down security deposits of up to 39% of imports to China from October 11.
China’s commerce ministry noted an investigation into the dumping of European-made products threatened to “substantially damage” its own brandy sector, Reuters reported.
This comes days after the European Commission passed rules which will see Chinese electric vehicles imported to the continent hit with tariffs of up to 35.3%.
French spirit makers appeared to bear the brunt of the news, with Remy Cointreau dropping 8% ahead of Pernod Ricard (EPA:PERP) and Hennessy cognac maker LVMH (EPA:LVMH).
Imperial Brands the outlier as FTSE 100 plummets
Imperial Brands PLC (LON:IMB) was an outlier as the only company in the FTSE 100 to gain over a per cent on Tuesday morning.
Having unveiled buybacks of £2.8 billion in a positive update earlier on, shares in the tobacco firm ticked up 4%.
The wider picture was less positive though, as Vistry’s profit warning continued to weigh on housebuilders and miners remained downtrodden alongside Asia-facing firms.
This came after measures unveiled overnight to support the Chinese economy by China’s National Development and Reform Commission chairman, Zheng Shanjie, disappointed.
Though pledges were made to speed up the likes of special purpose bond issuance, no new major stimulus plans were unveiled, hitting sentiment over efforts to revive the world’s second-largest economy.
“The National Development and Reform Commission [...] offered no details that investors craved on China's aggressive stimulus measures,” Tickmill Group partner Patrick Munnelly said.
“Markets were disappointed by the lack of stimulus specifics,” he added, which came after stimulus pledges by China’s central bank and government buoyed stocks last month.
Asia-focused Prudential PLC (LON:PRU) fell by 5.8% on Tuesday morning as a result and was joined by HSBC Holdings PLC (LON:HSBA) among the day’s losers.
Miners, having climbed following the previous measures which promised to address the likes of China’s struggling property market and in turn boost demand for commodities, also fell across the board.
Anglo American PLC (LON:AAL) dipped 6.1% early on, as Antofagasta PLC (LON:ANTO) and Rio Tinto (LON:RIO) lost over 5% each and were joined by Glencore PLC (LON:GLEN) among the day’s fallers.
Uptick in IPO activity expected after ‘subdued’ quarter
Accountancy EY has said an uptick in listings is expected over the final three months of the year and into the next after just two companies floated in London during the third quarter.
Floats by Rosebank Industries PLC and Aberforth Geared Value & Income Trust PLC onto London’s AIM and main market respectively raised a combined £64.8 million over the third quarter, against £359.8 million last year.
Asda loses further market share as Tesco , Sainsbury’s gain
Asda lost further market share in the three months to September as Tesco PLC (LON:TSCO) increased its leading position followed by J Sainsbury PLC (LON:SBRY).
Figures from Kantar showed that declining sales at Asda meant its market share fell from 13.7% to 12.6% year on year over the 12 weeks to September 29.
This meant discounter Aldi saw its gap to the UK’s fourth-largest supermarket narrow further, despite its market share dipping from 9.9% to 9.8%.
Sales at Asda dipped by 5.1% over the period, reflecting the retailer’s ongoing struggles, as these increased at five of the UK’s six largest supermarkets.
These included Lidl, Morrisons and Aldi, as the two largest, Tesco and Sainsbury’s, saw their market share increase further to 28.0% and 15.2% respectively on higher sales.
Kantar retail insight head Fraser McKevitt noted: “In the fiercely competitive retail sector, the battle for value is on.
“Supermarkets are doing what they can to keep costs down for consumers,” he added, “with spending still stretched”.
Unusually wet weather had buoyed sales of “classic warming staples” into September, McKevitt continued, including hot chocolate, soup and baking goods.
Over the four weeks to September 29, Kantar reported supermarket inflation increased by 2.0%, against 1.7% in the previous month.