Economy FTSE dips as fresh trade war fears rattle global markets

FTSE dips as fresh trade war fears rattle global markets

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People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015.

British shares retreated in pace with other European stock markets on Monday as investors took note of the bearish sentiment caused by the escalating trade dispute between the United States and China.

The FTSE 100 was down 0.9 percent by 0920 GMT, with financials, energy and material stocks weighing on the British blue chip index.

“It does seem to us that the time has probably come whereby all things very exposed to global trade flows will begin to underperform perhaps quite sharply,” wrote Neil Campling, co-head of the global thematic group at Mirabaud Securities.

The Wall Street Journal reported that U.S. President Donald Trump plans to bar many Chinese companies from investing in U.S. technology firms and block additional technology exports to China.

Micro Focus suffered the worst individual performance with a 3.8 percent fall as Europe’s tech sector took a hit from the trade spat.

Financials were the biggest drag for the index with HSBC, Prudential and Lloyds down 1.8 percent, 1.5 percent and 1 percent respectively.

Heavyweights BP and Royal Dutch Shell were down 1.6 percent and 0.7 percent as oil prices gave back gains made on Friday following an output agreement between major oil exporters.

Miners Glencore, Rio Tinto and BHP Billiton were down between 1.3 percent and 1.6 percent with Mike van Dulken and Artjom Hatsaturjants at Accendo Markets noting “weaker commodities providing a hindrance to FTSE Energy and Mining names”.

Among smaller stocks, Britain’s largest estate agent Countrywide tumbled over 22 percent after it lowered its half-year adjusted core earnings forecast, citing a sluggish market, and said it plans to issue more equity to cut debt.

British serviced office provider IWG jumped 2.8 percent after it said it was evaluating a possible cash offer from private equity firm Terra Firma.