FTSE dips on China import data but then turns around

Although China’s economy is to a large extent showing a recovery after the pandemic, import numbers are remaining stubbornly low.

Charts (1)

Although China’s economy is to a large extent showing a recovery after the pandemic, import numbers are remaining stubbornly low. With a large percentage of China’s imports being used in products that are eventually exported, exports are likely to slow down too over the months ahead. This is not good news for companies with a significant China focus which are already hurting from a decline in domestic sales.

London opened a touch lower on the news and was further weighed down by a decline in AstraZeneca and Smith & Nephew, but then reopening optimism took over and the index started turning around.

Travel industry shares were the best performers, with cruise operator Carnival leading the pack. 

On the surface of things airlines should still be struggling as the controversial two-week quarantine rule kicks off today and is expected to stop hundreds of thousands of travelers going abroad for a summer holiday. But investors seem to take the same view as Ryanair boss Michael O’Leary who called the rule a political stunt that will be unenforceable.

AstraZeneca merger likely to hit hurdles on both sides of the pond

With the pharma industry now embroiled in a frantic search for a coronavirus solution it was only a matter of time before a major merger and acquisitions situation occurred. Over the weekend AstraZeneca made that approach, proposing to merger with US drug maker Gilead Sciences in a deal worth potentially $240bn. However, the deal is likely to run into opposition on both sides of the pond, with the US unlikely to be willing to give up domestic control over a developer that can find a solution not only for COVID but also for other potential future outbreaks, the same being the case on the British side of the deal.

More from Indices

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.