Worries about China demand and UK consumer spending have sunk the FTSE 100 today, though tech stocks are once again in demand in the US, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Burberry results spark a FTSE 100 rout
“Burberry’s results today were dire, and the shares have reacted with a 16% drop to 14-year lows. But the read across has caught two very different sectors, retailers and mining. It’s not often the two are moved by the same story. The former have been hit by worries that Burberry’s problems are not an isolated case, and that UK consumer spending is on a downward trajectory. Meanwhile, the latter are down on China worries, amplified by the poor GDP figures that spell trouble for demand for raw materials and luxury fashion alike.”
Wall Street higher
“Across the pond, Wall Street has begun the week in strong form, led by Apple, which has managed to hit a new record high in trading. The summer squall in tech stocks last Thursday ended as quickly as it began, and even more lacklustre bank earnings has failed to dampen the mood. Small caps continue to outperform however, building on another of last week’s post-CPI developments, as hopes of a US rate cut in September continue to rise.”
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