Miners lead FTSE lower

The FTSE has headed into the red towards the close, with miners proving the biggest drag amid a raft of weak Chinese data points. Meanwhile, Tesco provides one bright spark, after the approval of their Booker takeover.

• US stocks drag Europe lower
• Tesco outperforms after Booker takeover approval
• Chinese data hits mining sector

Stocks have taken a turn for the worst this afternoon, as the US led negativity helping to drag the likes of the FTSE and DAX into the red. The latest UK CPI reading may have provided a brief respite from the sharp upward trajectory of inflation, yet for all extents and purposes we remain well above the 2% target set by the chancellor. With earnings continuing to lag behind inflation, the spending behavior of UK consumers is likely to deteriorate as real wages decline.

Tesco has provided one bright spark today, with Britain’s biggest supermarket gaining over 6% on a day which saw their takeover of Booker approved, while their German competitors Lidl and Aldi recalled a handful of products. Tesco’s takeover of wholesaler Booker came as a welcome surprise for shareholders given the expectation that the regulators would force Tesco to offload a number of their smaller stores before acquiring a firm which includes a whole host of smaller supermarkets under the Londis, Budgets, and Premier. Crucially this allows Tesco to also dominate the wholesale sector, providing entry into the catering sector, while the total Tesco & Booker sales figure will account for
 70% of the wholesale market.

Mining firms have proven to be the biggest drag upon the FTSE today, with Anglo-American, Glencore, Rio Tinto, and BHP Billiton representing the four biggest losers amid a slowdown in Chinese economic data. The October fall in Chinese industrial production, retail sales and fixed asset investment growth has come as an unwelcome surprise for the Australian economy alongside the miners, with the Aussie dollar falling sharply alongside the weakening mining sector.